PDI, PAN, PBB support foreign investment but criticize IMF
PDI, PAN, PBB support foreign investment but criticize IMF
Political and legal issues, including investigating former
president Soeharto and the threat of separatism, dominate the
current political campaign. Economic issues, including those on
foreign investment and the role of the International Monetary
Fund (IMF), are barely touched upon by any political party during
their campaign. The Jakarta Post talked recently to the leaders
and economic experts of three major parties -- the Indonesian
Democratic Party of Struggle (PDI Perjuangan), the National
Mandate Party (PAN) and the Crescent and Star Party (PBB) -- on
the issue.
JAKARTA (JP): If the general election results in a change of
the country's leadership, what will happen to foreign
investments?
The question is crucial in light of the fact that foreign
investments have played a dominant role in the country's economy.
Foreign investments which dominated the oil and gas and mining
sectors before the crisis have expanded into other sectors. Some
major foreign giants have expressed their commitment to enter the
banking sector, while several others might soon take over some of
the country's debt-laden conglomerates.
Foreign investors' dominance has sparked jealousy in many
local businesspeople. Most political leaders, however, are not
really bothered by the foreigners' paramount role.
PBB's deputy chairman, Farid Prawiranegara, PDI of Struggle's
secretary general, Laksamana Sukardi, and PAN's economic expert,
M Nawir Messy, said they could accept the reality.
If anything, they said, foreign investment was needed to speed
along the country's economic recovery.
"For us, ownership is not an important issue. Soeharto's
administration made it an important issue, to allow his children
and cronies to acquire some shares in the companies for free,"
Farid said.
"What is more important for PBB is that workers should have
their representatives in companies' management -- be they foreign
companies or local companies -- to allow them to participate in
the companies' supervisory board," Farid said.
PBB would propose for an amendment of the Corporate Law to
make the participation of workers in the supervisory board as
obligatory.
PDI of Struggle vowed to promote a sound market economy in the
country to lure global capital market.
"As (PDI chairwoman) Megawati (Sukarnoputri) said in a recent
meeting in Singapore, 'We share the market (that is) interlined
together'," Laksamana said.
Laksamana said PDI of Struggle has made "Restoring Confidence"
as its main economic platform given the fact that the country has
lost the confidence of the international business community as a
result of economic and political turmoil.
Under the Restore Confidence agenda, PDI of Struggle will seek
to provide legal certainties, create social stability and promote
clean governance.
"This is, in fact, a long-term program but it must be carried
out in tandem with any short-term and middle-term programs given
the urgency of handling the issue," Laksamana said.
Nawir said PAN's team of economic experts realized the
importance of foreign investment, but "Indonesia should not be
too dependent on foreign capital".
Indonesia should also make a regulation to prevent foreign
investors from controlling all aspects of the country's economy.
For PAN's economists, Nawir said, the government should find
novel ways to increase income from domestic resources to finance
its developmental programs rather than asking for more loans from
foreign financial institutions and governments.
Social damage
The three political leaders supported the IMF's role in
helping Indonesia survive the crisis. But they criticize the
agency for giving "too much" instruction to the government.
Laksamana praised the IMF for its "successful efforts to
contain the damage caused by the crisis on the country's
economy."
"So far, so good," he said, crediting the country's currency
stabilization and the decreasing trend in the country's inflation
rate to the IMF, which has arranged billions of dollars in
bailout funds to cover Indonesia's worst ever crisis.
But, Laksamana said, the government's high interest rate
policy as dictated by the IMF has caused "social damage".
He also criticized the privatization program being carried out
by the government on the IMF's instruction, saying the timing was
not right to sell the assets of state companies.
"Offering the assets now is only wasting time because no one
is going to buy them.
"The privatization should be carried out systematically and
with the right timing," Laksamana said.
Laksamana said the IMF had always consulted with PDI of
Struggle before signing any letter of intent with the government,
and the IMF had mostly "heard" the party's opinions, except for
the privatization issue.
Farid blamed the IMF for the economic hardship currently being
experienced by the country.
"If the Crescent Star Party wins the election, we shall face
IMF in a different way. We shall not ask it for money but demand
it be held responsible for all that has happened in the country,"
Farid said.
Farid blamed the IMF for making blunders in carrying out its
economic recovery program since it was not backed up with a good
political analysis of the situation in Indonesia.
He accused people like Coordinating Minister of Finance,
Economy and Industry Ginandjar Kartasasmita, PAN's chairman,
Amien Rais, the People's Awakening Party's chairman, Abdurrahman
Wahid, and Megawati -- with whom IMF has often consulted with --
as giving misleading political judgments to the IMF.
"The IMF is an experienced organization. Why has it made
mistakes in Indonesia? Undoubtedly because it received wrong the
input from the wrong people," Farid said. (jsk)