Inconsistent policies

Inconsistent policies

The government's policy decision to slap a 5 percent tax on
foreign exchange purchases has been aborted. It was (Minister of
Finance) Fuad Bawazier himself who last Friday announced the
short-lived policy to the public. Yesterday (Monday), even before
the decision could be implemented, Fuad announced its
cancellation, without going into more detail concerning the
reasons for this step. One could surmise that it was due to
objections raised by the International Monetary Fund.

Ever since we called on the IMF to help us get out of the
monetary crisis, the most conspicuous attitude displayed on our
side has been our inconsistency. And, because of this
inconsistency, we have tarnished our own image. So bad has been
Indonesia's inconsistency that it has already taken more than
four months for us to talk with the IMF. Now, an IMF team is in
Jakarta to renegotiate almost everything, despite the fact that
on Jan. 15 a 50-point agreement was signed by President Soeharto
and IMF Executive Director Michel Camdessus.

While these talks were still taking place, we suddenly came
out with a decision that startled the IMF. This indicates that we
have no grasp of the essential nature of negotiation and
agreement. Indonesia's conflict with the IMF actually stems from
differing perceptions regarding the market economy. When we
signed the agreement, the IMF assumed we were accepting the
market economy. What so surprised the IMF was that our
understanding was that the market economy should serve the
monopolies.

In our argument, monopolies should be maintained since they
control commodities which are essential for the masses. IMF
officials, however, could not accept that monopolies which
control goods and services essential for the sustainment of
people's lives should be placed in private hands.

At this stage, we lack a tradition that acknowledges the rules
and the reign of the market. Instead, we tend to regard market
sentiments as a threat to our sovereignty. So long as economic
management that tends to ignore the market remains one of our
persistent characteristics, our policies will continue to tarnish
our image. The world will continue to laugh at our capabilities,
our competence and our inconsistency.

-- Media Indonesia, Jakarta