Gus Dur-Megawati seen as cure for the economy

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)