It's time for Susilo to show concrete results

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.