It's time for Susilo to show concrete results

Umar Juoro, Jakarta

The political debate on the fuel price hike has absorbed a lot of attention of late. Not only has the House of Representatives spent a lot of time and energy on deciding whether to support or reject the policy, but also many students decided to waste their precious time, supposedly to be devoted to study, by participating in street demonstrations.

This may be what we call the price of democracy. Anyway, the House earlier this week finally agreed to the policy, although it was not clear as to how the legislators would deal with the fuel price increases as part of their revision of the 2005 budget. As for the students, they are likely to continue their street demonstrations against the higher fuel prices.

There has been a long tradition of student activists in this country opposing government policies the they perceive as adding to the burdens borne by the people.

From the debate on the fuel price increases and the final compromise deal reached to defuse the House opposition, one thing is quite clear -- the role of Golkar as the main political party has been instrumental. Without Golkar support, the policy would have been rejected by the House. Certainly, the role of Vice President Jusuf Kalla, the new Golkar leader, and Golkar's pragmatic approach to economic policy, contributed significantly to the compromise.

From now on, the Susilo administration will be more dependent on Golkar support to get its policies past tough scrutiny in the House. This is also because the president's Democratic Party is too small and inexperienced to influence decision making in the House, and the President's other political allies, such as the Prosperous Justice Party, are quite reticent about supporting policies that are considered unpopular.

Considering this new pattern in the political landscape, as an experienced political party Golkar would like to have more representatives in the United Indonesia Cabinet as a consequence of its support for the government.

Accordingly, for some time to come the government's attention will be preoccupied by political issues rather than the details of economic policy implementation, with the other big parties, especially the Indonesian Democratic Party of Struggle (PDI-P) and the National Awakening Party (PKB), becoming more hostile to government policies.

The government will still not to be able to concentrate on policy details, especially as regards difficult issues such as bureaucratic reform, taxation, labor relations and decentralization. The bureaucratic reform that the government envisions, but has not yet implemented seriously, might also be delayed or rendered ineffective until such time as the government's political coalition and the Cabinet has solidified.

Many of the new senior bureaucrats who will probably be installed soon after many delays might find themselves replaced again should there be a Cabinet reshuffle in October as VP Kalla has indicated.

Even though many political analysts say that politics is all about image, when politics is related to economic policy it is the real thing that counts.

Economic policy can never be successful if it is only based on image. It is concrete results that matter in economics. Considering the new configuration of the political scene. It would be wiser for the President and his VP to consider seriously sooner rather than later a Cabinet reshuffle, especially so as to give Golkar the power it feels it deserves.

By doing this, the other parties, especially the PDI-P and PKB, could play an opposition role in a healthy, democratic way. The government would also be able to focus on and speed up reform in a more sustainable way -- something that is essential to put the economy onto a path of high and sustainable growth.

There is no question that the popularity of the government, especially the President, and the political parties that supported the fuel price increases, especially Golkar, have declined significantly. This cannot be overcome through compensatory measures involving direct subsidies for health and education, no matter how effectively the government channels these.

The channeling of targeted subsidy is always easier said than done even in developed countries with reliable, competent bureaucracies. The only way the government can regain the support of the public is by giving them sustainable jobs through economic growth. But to attract investment the government needs to overcome the impediments to business, such as the lack of legal certainty, rampant corruption, taxation problems, labor strife and the difficulties associated with decentralization. Sadly, though, not much progress has been made in these areas.

The wrier is the Chairman of CIDES (Center for Information and Development Studies), and a Senior Fellow at the Habibie Center.