No confidence in the superstructure
No confidence in the superstructure
With reference to Osvaldo Coelho's letter in The Jakarta Post
of Feb. 4.
When the government dissolved 16 private banks, the rupiah
plunged from Rp 6,200 to around Rp 8,000 against the U.S. dollar.
As Michel Camdessus boldly signed the IMF rescue package with
President Soeharto, the rupiah nosedived to Rp 16,000 against the
U.S. dollar.
Earlier this week, World Bank President James D. Wolfensohn
was in town offering more help. Market sentiment was once again
negative, the rupiah registered a marginal slide of some 20
points.
Why has market response to almost every reform package been
negative? The reason is not an evaporating confidence in the
rupiah, but a lack of faith in the superstructure!
I agree with Coelho's suggestion that countries concerned with
Indonesia's plight should lift trade restrictions, rather than
offer a helping hand to an incapable regime.
Indonesia needs trade. That is beyond question. However,
Coelho oversimplifies the problem when he suggests that
impediments to trade are caused only by Indonesia's trading
partners.
Formerly, plywood could only be exported through a single
organization, Apkindo, which hindered trade. Numerous levies
textile companies must pay prevent revenue generated from exports
from trickling down to improve worker welfare.
Indonesian textile products sell at competitive prices in
Europe, but only at the expense of textile workers, who receive
very low wages. Workers have very weak purchasing power and have
suffered during current economic difficulties.
In Indonesia buoyant exports do not necessarily lead to a
better standard of living for the people. When the plywood
business boomed in the 1980s, forestry conglomerates fueled
vigorous expansion with the remarkable returns they made. In
1994, Barito Group controlled forest concessions the size of
Switzerland. Yet the living standard of Dayak people has not
improved.
The distribution of wealth is based on a long established and
unfair tradition of patronage. Those in power are part of this
system. Are they changing now? The people's trust has evaporated.
Yes, Indonesia needs trade, plus, fresh government.
KAFIL YAMIN
Bandung, West Java