Looking for a `Kwik' fix

The market has responded coolly to Tuesday's announcement of President Abdurrahman's economic team. The reaction contrasted to the rebounds we have become accustomed to in recent weeks. Following the general election in June, the announcement of the election results and the presidential election last week, the market rallied on the back of the country's political developments. The fact that the rupiah's exchange rate and local stock prices have shown little change in the last two days means that the market has neither accepted nor rejected the economic team.

The problem with the team is that most of its members are not familiar to the public. Kwik Kian Gie, who as coordinating minister for the economy, finance and industry, heads the team, is one of two exceptions to this facelessness. A politician with the Indonesian Democratic Party of Struggle (PDI Perjuangan), Kwik is well known for his astute and critical analyses of the country's economy. Before joining PDI Perjuangan, the new State Minister for Investment and State Enterprises Development Laksamana Sukardi carved out a reputation in his commentaries on the country's economic and banking scenes.

Since the other members are relatively unknown, Kwik and Laksamana will have to pull their weight on the team in its early days. Many people have aired doubts about the capabilities of Minister of Finance Bambang Sudibyo and Minister of Industry and Trade Jusuf Kalla. Other analysts have questioned the wisdom of including two high-ranking Army officers in the economic team.

Despite it's unknown quantity, the market has given the benefit of the doubt to the economic team. With the exception of Minister of Maritime Exploration Sarwono Kusumaatmadja, who served in Soeharto's Cabinets from 1988 to 1998, other team members have had no experience in the complex and intricate workings of running a government.

For the public, a lack of experience is not the biggest worry; their concern centers on the credibility and track records of the ministers. Bearing in mind the level of corruption in past administrations, previous government experience could in fact taint a minister's resume.

As Messrs. Kwik and Laksamana have often asserted in their commentaries, market confidence is essential. This condition was missing during the last administration, which was beset by one scandal after another. The market lacked confidence in B.J. Habibie's government, even though its economic policies, which were drawn up with the International Monetary Fund, were deemed workable.

The market's response to the new economic team demonstrated that it is not so much concerned about individual members within the team as about the team itself. With the team formed on the basis of political bargaining rather than a calculated decision to bring together the best people to carry out the job, concerns have been expressed about the coherence of the team. It is made up of people with different ideological backgrounds and allegiances.

Let's hope that all team members will live by the adage of people taking public office: that their loyalty to their party ends the moment their loyalty to the nation begins. To win over public and market confidence, Kwik and his colleagues must overcome their ideological differences and project unity.

The former administration put Indonesia's economic recovery process on hold for too long. Other Asian countries are already well on the road to recovery. Indonesian programs have been in existence for some time just waiting to be executed. The banking recapitalization and debt restructuring programs may need to be fine-tuned, but there is no reason for the new government to send them back to the drawing board. These programs have not worked thus far because there was simply no credible leadership to implement them.

That major stumbling block has now been removed with the establishment of a popularly elected government. Kwik should seize on this opportunity to build on the confidence and trust of the people and local and foreign investors. He must resist the inclination to implement populist policies -- as the previous administration often did -- and be prepared to take tough choices. Even Kwik was once guilty of looking for a short cut solution after he proposed a return to some form of a fixed exchange rate system.

An economic recovery is a slow and painful process. But it must start with winning public and investor confidence. That job of restoring confidence is the government's primary task. There is simply no quick fix for our economic ills.