Mixed expectations for new Cabinet

Mixed expectations for new Cabinet

JAKARTA (JP): Bank Indonesia Acting Governor Anwar Nasution
speculated on Friday that Coordinating Minister for Economy,
Finance and Industry Kwik Kian Gie would be recruited into the
revamped Cabinet to fill the position he just resigned.

Anwar said that Kwik" has many positive values and good
relationships with the foreign community.

"Kwik has been a good friend of Megawati during difficult
times so the two have a strong supportive relationship. Kwik can
read the mind of Megawati so he can become a bridge between
Megawati and the other ministers," Anwar told reporters after
Friday prayers.

Kwik surprisingly announced his resignation on Thursday ahead
of an impending Cabinet reshuffle on Aug. 21.

Kwik said that the move was made to allow President
Abdurrahman Wahid to freely restructure and reshuffle the
Cabinet.

An informed source close to the President disclosed that
Abdurrahman seemed disappointed by Kwik's revelation to the media
of his letter of resignation before the President himself
received the letter.

"Kwik seemed to resign in bad faith, expecting other economics
ministers to join his move. But as it turned out none of his team
members followed his step," the source added.

Fortunately, Kwik's move caused a highly positive market
reaction, the source added.

"The fact that the rupiah and the stock market continue to
rally after Kwik's resignation clearly shows that the market had
been uncomfortable with him as chief economics minister," the
source added.

President Abdurrahman Wahid announced earlier this week that
he would reshuffle the discredited cabinet in a bid to improve
the performance of his much-criticized administration.

Abdurrahman also said on Wednesday that he would hand over to
Vice President Megawati Soekarnoputri the day-to-day technical
work of running the administration.

The announcement has been welcomed by major factions in the
People's Consultative Assembly who have strongly criticized
Abdurrahman's weak administrative skill. The move also has helped
ease tension between Abdurrahman (Gus Dur) and top legislators.

Gus Dur said that he would appoint a coordinating minister to
assist Megawati.

Gus Dur declined to comment on whether he would reappoint Kwik
to the new Cabinet, although he said that the reshuffle would be
discussed with Megawati.

Kwik, known as a respected economist but a weak administrator
and coordinator, is also a senior executive of Megawati's
Indonesian Democratic Party of Struggle, the largest political
party in the legislature.

The President is expected to announce the new Cabinet on Aug.
21, which he said would comprise of 60 percent professionals or
technocrats and 40 percent politicians.

The rupiah has strengthened since Abdurrahman announced the
delegation of the day-to-day running of the government to
Megawati.

The local currency is expected to strengthen again on Monday
unless there is significant political development that unsettles
the rupiah over the weekend.

The rupiah extended its gains late on Friday to close at Rp
8,345 per U.S. dollar as domestic political tension eased. The
rupiah was quoted at Rp 8,360 late on Thursday. The local
currency was at its 21-month low of Rp 9,570 per dollar last
month amid fears of worsening political instability.

The Jakarta stock market also gained with the composite index
closing 3.5 percent higher at 505.79 points as local players were
encouraged with the prospect of further gains in the rupiah.

Asked about Finance Minister Bambang Sudibyo, who is widely
expected to be excluded from the revamped Cabinet, Anwar said
that Bambang was not suitable in his current position.

"Bambang will be more suitable as the State Minister for
Investment and State Enterprises Development or head of the
Indonesian Bank Restructuring Agency (IBRA)," he said.

"I have told this to Bambang before. He is an accountant and
is not suitable to handle macro issues. Particularly, his
experience and knowledge in macro economy is very limited," Anwar
said.

In a related development, the Indonesian Economists
Association (ISEI) suggested in a letter sent on Friday to
Abdurrahman that Bambang be retained as Finance Minister to allow
him to implement the crucial regional autonomy policy scheduled
to begin early next year.

ISEI said that Bambang had worked hard to design and introduce
the regional autonomy policy and retaining him would facilitate
execution of the policy.

"We expect the President to give Bambang the opportunity to
continue his job and (realize his) commitment made to regional
leaders throughout the country," the association said.

It said that failure to implement the regional autonomy and
inter-governmental fiscal balance policies would risk a
disintegration of the country.

Improvement

Meanwhile, the People's Consultative Assembly (MPR) Speaker
Amien Rais said on Friday that the restructuring of the Cabinet
should result in an improvement in the performance of the
government.

Amien said that if the administration failed to improve, the
House of Representatives could issue several warnings to the
President before the legislature proposed an MPR extraordinary
meeting that could lead to the impeachment of the President.

Amien suggested that the President's economic think tanks --
the National Economic Council and the National Business
Development Council -- be dissolved as they had proven to only
make things worse rather than helping Gus Dur implement better
economic policies.

Separately, former Head of the Alumni Association of the
University of Indonesia (Iluni) Haryadi Dharmawan blasted Gus
Dur's plan to form another coalition Cabinet of fully
professionals and political party representatives.

"Hasn't Gus Dur learnt from the failure of his current
coalition Cabinet?", Haryadi argued.

Even though he anticipated some problems if none of the major
political parties represented in the Cabinet, he reckoned that
the people and the House would fully support the ministers if
they perform well. (/rei/bby)