Prolonged crisis of confidence feared
Prolonged crisis of confidence feared
JAKARTA (JP): Analysts warned over the weekend that markets
could react negatively to the new cabinet, as most appointees
were not perceived to be pro-reform and this could hinder the
process of regaining public confidence in the government.
However, business leaders and some other observers were
cautiously optimistic, saying that the new cabinet would be able
to strike a better understanding with the President when tackling
the crisis.
Economists Faisal Basri and Hartojo Wignjowijoto said the new
cabinet line up failed to address domestic and international
concern over blatant nepotism, collusion and corruption in
Indonesia.
"Judging by their track records, most of the people in the
cabinet are incompetent," said Faisal Basri, a noted economist at
the University of Indonesia, adding that it is difficult to
expect economic reform from the new cabinet.
Most of them are Soeharto loyalists and would do anything to
serve the President's interests, Faisal added.
"This once again demonstrates that the President has not paid
heed to widespread criticism of nepotism, collusion and
corruption," Faisal said.
Furthermore, by appointing timber tycoon Muhammad 'Bob' Hasan,
a long-time confidant of Soeharto's, as Minister of Industry and
Trade, the President has further strengthened the perception of
widespread cronyism in Indonesia, Hartojo said.
Hasan lost a highly lucrative and much criticized cartel-like
plywood marketing organization under reforms carried out in
exchange for US$43 billion in loans from the International
Monetary Fund (IMF).
Sri Mulyani Indrawati, a senior economist from University of
Indonesia, observed that regaining public confidence in the
government was the first task facing the new cabinet.
"What we have now is not merely a currency crisis but a crisis
of public confidence in the government," Mulyani was quoted by
Antara as saying Saturday.
She refused to comment on why most economists from her
university had been overlooked for cabinet posts, but she said
"we should give them a chance to work."
Both Faisal and Hartojo regretted the reappointment of
problematic ministers from the previous cabinet like Haryanto
Dhanutirto, Subiakto Tjakrawerdaya and Sanyoto Sastrowardoyo.
Haryanto, formerly minister of transportation, was appointed
as State Minister for Food, Drug and Horticulture, Subiakto was
retained in his previous position as Minister of Cooperatives and
Small Enterprise and Sanyoto remains the Minister of Investment
Development.
Besides allegations of corruption, Haryanto was seen as
incapable of managing the country's transportation sector during
his last term in office.
Subiakto has been strongly criticized for suggesting what many
businesspeople feared would become a new form of clove trading
monopoly, one of the monopolistic practices which was supposed to
come to an end under the IMF-arranged reforms.
"Both domestic and international fund managers know exactly
who they are. This could be the beginning of the end for this new
order government," Hartojo said.
Anwar Nasution, dean of the University of Indonesia's Faculty
of Economics, also warned that the new cabinet could exacerbate
the crisis of confidence in the government.
"You can not send a satpam (a civilian security guard) to face
the Kopasus (a special army commando)," Anwar said.
Meanwhile, agronomist Bungaran Saragih of the Bogor Institute
of Agriculture welcomed President Soeharto's decision to appoint
Sumahadi as Minister of Forestry and Plantations and Justika
Sjarifudin Baharsjah as Minister of Agriculture.
But Bungaran expressed surprise that the new cabinet contained
only a small number of capable economists, and especially experts
in macroeconomic policy.
"It is rather strange because our country is facing a dreadful
economic crisis which will take a long time to solve. The new
cabinet should have included a lot of economic experts to help
lift the nation out of its crippling economic situation," he
said.
Chairman of the Indonesian Footwear Association Anton J. Supit
said people should give the new cabinet two or three years to
prove their ability.
"We must give them a chance. Everyone has his or her first
opportunity," Anton said Saturday.
Supit refused to comment on some of the new names in the
cabinet, but he commended the appointment of former director
general of mining Kuntoro Mangkusubroto as the new mines and
energy minister.
"Kuntoro is a perfect choice based on his experience,
credibility, integrity and character," he said.
Commenting on the new industry and trade minister Bob Hasan,
Supit said that doing business and working as a cabinet minister
were totally different tasks.
"Businessmen must be profit oriented, but ministers have to
serve the public," he said of Bob Hasan.
The chairman of the Association of Edible Oils Industries,
Nafis Daulay, said that the new cabinet members were agreeable as
they had been the choice of President Soeharto.
"These are the people Soeharto thinks can assist him in
governing the country. We can only pray that they will succeed,"
Navis, who is also an executive of the Indonesian Association of
Palm Oil Producers, said in a telephone interview from Medan,
North Sumatra.
Nafis lauded the decision to move responsibility for the
plantation sector, formerly under the Ministry of Agriculture,
with the Ministry of Forestry.
The decision would improve coordination and make issuing
plantation licenses more efficient, he said. (team)