New economic czar named

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)