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