New economic czar named

JAKARTA (JP): In a second Cabinet shake-up in less than one month, beleaguered President Abdurrahman Wahid reshuffled his economic ministers on Tuesday in a bid to create a more effective economic team.

In a statement read out on behalf of the President by a spokesman, Abdurrahman named Burhanuddin Abdullah, currently deputy governor of Bank Indonesia, as the new Coordinating Minister for the Economy, replacing Rizal Ramli.

Rizal will replace Prijadi Praptosuhardjo as Finance Minister. Prijadi no longer has a position in the Cabinet.

Abdurrahman, popularly called Gus Dur, also named the secretary-general of the Ministry of Communications Anwar Prijadi as the new State Minister for Administrative Reforms, a position which had effectively been vacant since January, following the resignation of Ryaas Rasyid.

"The consideration that efficiency should be optimized is the primary purpose of the change (reshuffle) that was made to allow us to achieve the set (of economic targets)," Abdurrahman said in a brief opening statement, before asking his spokesman Yahya Staquf to read out his decision at a brief afternoon media conference at Merdeka Palace.

But Yahya later told the media that Burhanuddin was expected to be able to improve relations with the International Monetary Fund (IMF), which has delayed the disbursement of its next loan tranche to the country since late last year, due to signs that the government was wavering in the implementation of an agreed economic reform program.

Separately, Burhanuddin said that his top priority would be to get the IMF economic reform program in the country back on track.

Burhanuddin said that the move was crucial to help revive investors' confidence in the economy.

"One very important thing for all of us is to get the IMF program back on track. I will try to improve our relations with the IMF," he told reporters at Bank Indonesia headquarters.

Experts have said that continued IMF support is crucial, particularly as the credibility of the current 2001 state budget hinges on the financial support of international lenders such as the World Bank, the Asian Development Bank, and the Paris Club of creditor nations.

Burhanuddin, who started his career at Bank Indonesia in 1981, was appointed deputy governor in charge of the banking sector and international affairs in August last year. Between 1990 and 1993, he was an assistant executive director with the IMF in Washington D.C.

Rizal, who often expressed disagreement with the IMF, welcomed the appointment of Burhanuddin.

"What is very important is credibility, professional experience and the ability to engage in teamwork. Burhanuddin has such qualities," he told reporters.

Rizal said that after his inauguration, scheduled for today, he would immediately proceed with deliberations into the 2001 state budget with the House of Representatives state budget task force.

"What has already been agreed with the House (task force) will stand," he said.

The House task force had earlier reached agreement with the outgoing Finance Minister Prijadi to raise fuel prices by an average of 30 percent later this week, and electricity rates by an average of 17.47 percent early next month. The moves are part of measures proposed by Prijadi to help maintain the deficit in the current state budget at a safer level. The House has yet to reach agreement over plans to raise value added tax (VAT) to 12.5 percent from 10 percent, and to issue so-named deficit bonds worth around Rp 2.9 trillion.

Rizal expected the state budget revisions to be completed as soon as possible.

Prijadi had earlier said that the state budget revisions were expected to be completed later this week.

The Cabinet reshuffle was announced at a time when Prijadi was debating the state budget revision with the House. The debate was later postponed following the announcement.

"... Honestly, I am no longer able to concentrate," Prijadi said before closing the debate.

Completion of the state budget revisions was part of the conditions demanded by the IMF for the disbursement of its next loan tranche.

The IMF has also demanded that the government fully adopt the recommendations of an independent panel over the controversial amendment of the Bank Indonesia law which critics, including the IMF, said was merely designed to accommodate the wish of the President to dismiss the existing Bank Indonesia governor and the deputy governors.

The House has yet to complete the debate over the government- proposed amendment of the central bank law. (rei/prb)