Monday's economic meeting
Monday's economic meeting
We somewhat worriedly expected a worsening economic management
after President Abdurrahman Wahid decided last month to
personally chair a weekly economic monitoring meeting on Mondays.
After all, he has, so far, been known for a lack of interest in
complex economic issues and managerial discipline. Moreover, he
often meets individually with economic ministers to discuss
matters that are supposed to be the purview of the coordinating
minister of economy, finance and industry, Kwik Kian Gie.
However, our concerns seem to have been unfounded. The issues
discussed and resolved in the third weekly meeting, as explained
in a media release issued on Tuesday morning, gave some assurance
that the forum could contribute greatly to the improvement of
coordination between economics ministers.
The latest weekly meeting, for example, assessed latest
developments in corporate foreign debt and bank restructuring
programs, issues related to the investment climate, the latest
preparations for decentralization and disputes between local
people and mining contractors, and reviewed the implementation of
reform measures included in the new letter of intent to the
International Monetary Fund (IMF).
The format of the discussion and the subsequent instructions
given by the President to the economics ministers at the meeting
provide a very positive signal that the government has the right
sense of priority with regard to resolving the woes that are
dogging the economy.
As the weekly monitoring meetings continue they will hopefully
develop into a very effective institutional framework to help
translate political resolve into bureaucratic resolve in economic
matters. Such a regular gathering can be very efficient because
it brings all the economic ministers face-to-face with the
President, and decisions can be debated vigorously before the
President gives his final fiat.
The meetings will keep all economic ministers on their toes
because they will have to be ready with answers to the
President's questions. Any problems of inter-ministerial
coordination or cooperation can be resolved by executive fiat on
the spot. For example, the industry and trade minister can
directly raise any problems with shipping or port services that
hinder exports and then the President can immediately check them
with the minister of transportation and then decide on the best
solution.
The weekly meeting would be more effective if it was also
attended by representatives from industrial associations as these
businesspeople could candidly raise problems they were
encountering in the field. Again, the President could immediately
refer these problems to the ministers concerned.
However, to ensure the meeting is both efficient and
effective, it should be maintained as a select gathering of
ministers and top bureaucrats. The representatives of industrial
or trade associations invited to the meeting should be selected
according to the urgency of the problems or agenda to be
discussed.
The Cabinet failed in the first test of its performance last
month when it fell behind schedule in implementing many of the
reform measures stipulated in the Jan. 20 letter of intent,
prompting the IMF to postpone the second disbursement of its loan
from April to June.
The weekly meeting should therefore be maintained, at least
until the economic ministers develop into a solid working team.
However the government sees its economic-policy making mechanism
right now, what it is actually doing is none other than economic-
crisis management as most companies, buried under mountains of
debts, remain under the emergency unit of the Indonesian Bank
Restructuring Agency and most banks are still too weak to inject
lifeblood into the economy. And a critical situation requires
fast and firm decisions and an effective monitoring system to
provide an early-warning mechanism before problems get worse.