Law and order key to economic cure: Budiono
Law and order key to economic cure: Budiono
JAKARTA (JP): National Development Planning Board (Bappenas)
Chairman Budiono said on Wednesday that maintaining law and order
was essential if the country was to overcome the economic crisis.
He explained that although the crisis-hit economy was already
starting to bottom out, as shown by the positive trends of
various economic indicators, the sociopolitical conditions would
still be a significant factor in determining the future course of
the economy.
"Based on my discussions with businesspeople, the most
important factor in passing through this transitional period is
maintaining law and order," he told a seminar on the economy
organized by the alumni of Gadjah Mada University.
He added that some businesspeople deemed that Indonesia was
still below crisis-hit Thailand and South Korea in terms of law
enforcement.
Parts of Jakarta descended into lawlessness on Saturday for
several hours following a bloody clash the previous day between
the military and students who were protesting last week's Special
Session of the People's Consultative Assembly.
They deemed it failed to implement major political reforms and
was only intended to maintain the status quo of the military, the
ruling Golkar party and President B.J. Habibie -- all of which
are seen as inextricably linked to former president Soeharto.
The chaos almost matched the scale of the widespread rioting,
arson and looting which took place in May that led to Soeharto's
fall.
Students continued their rallies on Wednesday.
"Businesspeople are skillful in dealing with various risks
under normal conditions, but in the absence of law and order they
face difficulties," Budiono said.
He said, however, that maintaining law and order was not meant
to preserve (the political) status quo.
"In the context of law and order, there can still be complete
(political) reform," he added.
"We are currently at the crossroads. What we decide today will
determine where we will be in the next six to 12 months," he
said.
He pointed out that there were two scenarios: the good and the
bad.
"Where the country will end will depend on whether we can
maintain law and order," he said.
He explained that the good scenario would be a synergy between
positive economic development and stable sociopolitical
conditions so that the country could have a high quality general
election, which is scheduled for next year.
"If this can be achieved, our economy will recover by the year
2000," he added, pointing to the chain reaction of a stable and
stronger rupiah pushing down inflation and interest rates, which
in turn would increase capital inflows, boost production and
investment, improve the supply of commodities, and further lower
inflation.
"This virtuous circle is not something automatic because in
every link of the chain there's a precondition linked to the
sociopolitical system and progress in structural and
institutional reforms," Budiono said.
He was optimistic that there was a great probability that the
good scenario would emerge because the nation's political
leaders, both formal and informal, were still rational and loved
the country.
The International Monetary Fund said on Saturday, after
completing its regular monthly review on Indonesia's economic
reform programs, that the country was continuing to make
encouraging progress in overcoming the crisis.
Since early September the rupiah had strengthened considerably
and inflation had slowed abruptly, the Fund said, adding that
interest rates had also begun to fall.
The government has promised that rates will decline further if
the rupiah remained stable and inflation continued to improve.
(rei)