Jakarta governor misleads public, say economists

Jakarta governor misleads public, say economists

Damar Harsanto, The Jakarta Post, Jakarta

Economists warned that Governor Sutiyoso's 2001 budget speech
could give a misleading impression to the public about the actual
economic situation in the capital.

Director of the Institute for Development of Economics and
Finance (Indef), Bustanul Arifin, as well as Center for
Information and Development Studies (Cides) director, Umar Juoro,
cast doubt on the use of gross regional product per capita to
measure wealth, even though Sutiyoso had claimed it was "a
macroeconomic indicator of the people's welfare".

"Economists never use gross regional product to measure public
welfare. It is misleading as it doesn't reflect the actual
situation," Bustanul told The Jakarta Post on Monday.

Gross regional product is the monetary value of all the goods
and services generated by a local economy over the year.

Sutiyoso claimed in his budget speech last week that the
capital's economic situation was much improved, pointing to
Jakarta's gross regional product as evidence of this. Quoting
data from the Jakarta branch of Central Bureau of Statistics
(BPS), he said that gross regional product per capita last year
jumped by a significant 15 percent to Rp 25 million (about
US$2,500) from Rp 22 million in 2000.

Paramita Dewi of the Jakarta BPS said that the use of gross
regional product was irrelevant in reflecting the city's actual
economic situation due to the fact that Jakarta also served as
the Indonesian capital so that it hosted many corporate
headquarters and government institutions.

"All output from both private and state institutions,
including Bank Indonesia, are recorded in Jakarta's gross
regional product. This is divided by the number of Jakarta
residents, a total of 8.3 million people last year," Paramita
said.

That's why the big outcome (of gross regional product) is not
comparable with the statistical reports of other provinces, she
said.

The country's economy grew by 3.32 percent last year, as
against 4.8 percent in 2000. The government has targeted the
country's economy to grow by up to 4.0 percent this year.

In his speech, Sutiyoso stated that the economic growth of the
capital had declined slightly by 0.34 percent to 3.64 percent as
compared to 2000's figure of 3.98 percent, while the inflation
rate barely increased to 11.52 percent last year from 10.29
percent the previous year.

Umar Juoro said that Sutiyoso's figures clearly showed that
Jakarta's economy was far from recovering, as claimed by
Sutiyoso.

"Besides, economic growth over the last two years has nothing
to do with the performance of the administration. It must be
attributed to the painstaking efforts of the business sector to
survive amid the country's economic slump rather than the result
of the government's policies," Umar said.

Sutiyoso's administration, which had introduced no major
policies to help business, thus could not claim the credit for
the growth, as the governor had tried to do in his speech.

Instead of trying to claim credit for success, Sutiyoso's
administration should focus on the welfare of residents by
addressing such problems as increasing unemployment and poverty
among those living in Jakarta, Umar said.

The City Council is scheduled to present its response to
Sutiyoso's speech on Tuesday.

The speech itself has been criticized by some councillors as
ignoring public concerns over the administration's failure to
prevent the recent floods or improve waste management.