Sat, 12 Aug 2000

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.


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)