Not advise, but action

Not advise, but action

What the new government urgently and badly needs in coping
with the most pressing economic problems is not advice, but
effective, hands-on management by the chief executive. Hence,
whatever may be the format and structure of the National Economic
Council (NEC) president-in-waiting Susilo Bambang Yudhoyono plans
to set up within his executive office, it should be designed to
operate like an economic crisis management center.

As a crisis management center, the NEC should be action-
oriented, able to make fast decisions on policy measures to
resolve economic problems, and coordinate and monitor their
execution. So should be NEC's sister organization, the National
Security Council.

The rationale is that however significant has been the
progress the outgoing government claims to have made in
macroeconomic stability, our economy is still bleeding, with
around one third of total state revenues going to service
external and domestic debts and almost 20 percent to subsidies of
fuel and other basic commodities.

With more than 38 million people living in absolute poverty
on or less than US$1 a day, and almost a hundred million of
others under the international $2 a day poverty line, as well as
over 41 million unemployed or under-employed people, there is no
other way to describe our economic condition, but critical.

Susilo should avoid the mistake made by then-president
Abdurrahman Wahid in 2000 with his economic council of advisers
which amounted to little more than decorative furniture at his
executive office.

Susilo and his campaign team have rightly diagnosed the
country's economic ills and outlined the right policy
prescriptions in his economic program. The fundamental issue then
is management. Several analysts call it the management of
expectations -- of the voters. As a management issue it is all
about deciding the right priorities, coordinating and
communicating.

Hence the most pressing agenda for the new government is how
to sequence the policy measures so that they are politically
acceptable, economically feasible and are perceived by the market
as credible.

It is therefore well-advised for the new president to model
his economic council on the powerful NEC at the American
president's executive office, which is in charge of coordinating
the making and implementation of policies and monitoring their
execution.

The people expect concrete, quick results, however small they
may initially be. An early harvest could become a confidence-
building block for other more difficult measures.

This should be the role of the NEC Susilo will personally
chair. This council should function as a nerve center or an
operation room where economics ministers, top bureaucrats,
analysts and leaders of business associations, discuss concerted
efforts to fix economic problems.

Far from being perfunctory, a NEC meeting should run as a
brain-storming session that brings the country's political
leadership face-to-face with representatives of the main economic
agents, all bent on translating the political resolve into real
action by the bureaucracy and the business community.

Any issues such as barriers to international trade and new
investment such as credit financing, port clearance, imports of
inputs, tax assessment should be settled at the highest leveln
and immediately. The president's personal presence at every NEC
meeting will keep all officials on their toes because they have
to be ready with answers to any questions the president will ask.

The brain-storming conference will make action more important
than bureaucratic procedures and rigidities, resolving problems
by executive fiat on the spot. The fundamental rationale is that
a critical condition, like the current economic situation which
is bleeding the country dry, requires truly fast decisions.

An effective decision-making and management center like the
NEC would be more capable of prioritizing actions and building up
public acceptance of their implementation.

The combination of leadership provided by the president, the
right management by economics ministers and the support provided
by business leaders in the decision-making process will create a
more conducive environment for managing the economy.

-----