Mega seen as moving too slowly in resolving economic woes
Mega seen as moving too slowly in resolving economic woes
Dadan Wijaksana, The Jakarta Post, Jakarta
Although 100 days may be too short to evaluate the performance
of President Megawati Soekarnoputri in tackling the country's
deep economic problems, some say that her economic team has been
moving too slowly.
"Generally speaking, it has been "slow motion" progress by the
government. However, I must say that they're still on the right
track," said Hadi Soesastro from the Centre for Strategic and
International Studies (CSIS), adding that the government had yet
to make a serious mistake so far.
Economist Didiek J. Rachbini said that a lack of daring action
was mostly to blame for the country's slow progress in achieving
economic recovery.
He said that the high expectations the public had when the
economic team was first set up had been brought back down to
earth because of the government's inability to boldly explore new
ways of easing the burdens that people had to bear as a result of
the economic crisis.
"In foreign debt settlement, for instance, we keep burdening
the public by paying the debt with their tax payments," Didiek
said, pointing out that other countries had managed to obtain
debt relief facilities.
"The reality that the public has to deal with at the moment is
far from their expectations," he said.
Megawati assumed power late in July after Abdurrahman Wahid
was dismissed by the People's Consultative Assembly (MPR) due to
incompetence.
She was praised both at home and overseas by, among others,
the International Monetary Fund and the World Bank when she
formed a credible economic team, boosting the value of the rupiah
against the U.S. dollar to 8,500, compared to around 11,000
during Abdurrahman's presidency.
Coordinating Minister for the Economy Dorodjatun Kuntjoro
Jakti said at the time that the priority of the economic team
would be to create employment and improve the country's sovereign
credit rating to allow local firms to seek overseas funds at
lower cost.
But the world economic recession, deepened by the Sept. 11
terrorist attacks on the U.S., has created new difficulties for
Megawati in lifting the country out of its economic crisis and
creating more jobs.
Growing anti-U.S. sentiment at home and difficulties with the
new regional autonomy policy are also creating new jitters among
foreign investors.
The rupiah is currently hovering at around 10,200 compared to
the state budget assumption of Rp 9,600, while Bank Indonesia's
benchmark interest rate (SBI) has jumped to 17.58 percent. Year-
on-year inflation has been in worrying double-digit territory
over the past couple of months.
The government's 3.5 percent economic growth target this year
is also unlikely to be achieved amid the global slump, while slow
progress in the key privatization program is placing a huge
question mark over the current state budget.
Economist Umar Juoro said that the economic team lacked
cohesion in determining priorities for getting the country out of
the crisis.
"The government's performance has been disappointing. They
have failed to create solid synergies," Umar said.
"A failure to determine priorities is the cause of that."
He also stressed that what the government had been doing so
far was merely securing its own agenda without giving much
thought to the urgent need of providing the public with pro-
growth policies.
"They have been kept busy with the attempts to secure
agreements with the IMF, draw up a budget, etc.
"Meanwhile, they have offered little stimulus in the way of
fiscal and monetary policies to help revive the public's appetite
for doing business," Umar added.
He asserted that low inflation, increased lending from banks
and employment opportunities were what people really needed at
the present time.