Gus Dur-Megawati seen as cure for the economy
JAKARTA (JP): Newly elected President Abdurrahman Wahid and Vice President Megawati Soekarnoputri are seen by both politicians and economists as having the ability to effectively cure the country's ailing economy.
People's Consultative Assembly Deputy Speaker Kwik Kian Gie said both Megawati and Abdurrahman, popularly known as Gus Dur, would provide the country much-needed social and political stability.
"Social and political stability will be more guaranteed," Kwik, who is also Megawati's economic adviser, told The Jakarta Post following the vice presidential election on Thursday afternoon.
He said social and political stability would help the government lead the nation out of its multidimensional crisis, because stability would restore badly needed confidence in the economy.
Golkar Party legislator Ekky Syachruddin concurred, emphasizing that both Abdurrahman and Megawati were elected through a democratic process.
He also said he was convinced the rupiah and stocks would rise following their elections. "This is the result of the work of God. It's beautiful."
Abdurrahman became the fourth president on Wednesday, replacing B.J. Habibie, while Megawati was elected on Thursday. These were the country's first democratic presidential and vice presidential elections in more than 50 years.
Thousands of Megawati supporters took to the streets late on Wednesday after Megawati, whose Indonesian Democratic Party of Struggle (PDI Perjuangan) garnered the most votes in the June general election with more than 35 percent of the total vote, lost the presidency to Abdurrahman.
Megawati supporters in several major cities across the country vented their anger by setting buildings and cars on fire and clashing with security personnel.
However, the streets were quiet on Thursday as all signs pointed to Megawati becoming vice president.
The financial market reacted positively to the prevailing calm and the prospect of Megawati becoming vice president.
The Jakarta Stock Exchange closed before the votes from the vice presidential election were counted, but the main composite index rose 5.5 percent as traders viewed the withdrawal of Megawati's main contenders for the vice presidency as an indication of backroom dealings to secure her victory.
The rupiah also enjoyed a healthy rally on Thursday on expectations that Megawati would clinch the vice presidency. At the close of trade, the rupiah was at 6,950 against the U.S. dollar, sharply stronger than its 7,450 close on Wednesday.
The rupiah traded in a tight range early in the session until two major vice presidential candidates dropped out of the contest, paving the way for Megawati's victory. The news of the withdrawals sent the rupiah to the 7,000 level.
"There will be a period of euphoria in the market," said Raden Pardede, a senior analyst at PT Danareksa Securities.
Raden said the Abdurrahman-Megawati team would ensure social and political stability for longer than any other political pairing.
He said the election of Megawati as vice president was positive news for the market, because Megawati's party won the June general election and she would become a strong backup for Abdurrahman, whose health is questionable.
International Monetary Fund (IMF) managing director Michel Camdessus welcomed the election of Abdurrahman on Wednesday and pledged to help Indonesia realized its "immense economic potential".
The IMF and the World Bank suspended loan disbursements to Indonesia following the failure of the Habibie administration to solve the high-profile Bank Bali scandal.
Economist Laksamana Sukardi of PDI Perjuangan said market confidence in the economy began to grow after the election of Abdurrahman.
An analyst at Econit, Arif Arryman, sees the Abdurrahman- Megawati team as being able to end the country's political and social instability given the broad grassroots support they enjoy.
"But their credibility will depend on the quality of the Cabinet they form within the next few days," Arryman said.
He said it was vital for the new Cabinet to be professional and not too accommodative of the competing interests of political parties.
"We need a solid, professional working team to defuse the time bombs left behind by the previous administration," Arryman said.
Laksamana agreed, calling on the President to pick clean and capable personalities for economic and financial portfolios.
"It's better for the President to choose new faces for the Cabinet to ensure that ministers are clean of past corruption," he said.
Indonesia's economy contracted by more than 13 percent in 1998 and suffered hyperinflation of more than 70 percent.
The difficulty of engineering an economic recovery increased amid the social and political unrest which plagued the country prior to the presidential election. (rei/jsk)