Prove the market wrong

Prove the market wrong

On the first day of his nomination as head of Indonesia's economic team, Rizal Ramli announced the outlines of his plan to improve this country's economic condition. Four points will take priority under his command as coordinating minister for the economy. These are:

First, to create stability in the financial sector. This is the first priority given the gap that exists between positive growth in the real sector and instability in the financial sector.

Second, to increase the number of rural development projects to counter the decline in rural wages. Third, the government will take greater initiative in encouraging the development of small and medium-scale enterprises through the utilization of institutions with a good record in this area. Fourth, to encourage exports by activating the industry's 40 percent of idle installed capacity, using the banking sector's surplus liquidity.

The coordinating minister also affirmed his intention to step up cooperation with international lending institutions such as the World Bank, the Asian Development Bank and the International Monetary Fund. He said, however, that a number of adjustments were necessary to focus (lending policies) more on issues of purely economic development interests.

So far we have been hearing mostly doubts about Cabinet's ability to get the economic wheels turning again. The beating which the rupiah has taken as a reflection of the market's disappointment cannot, of course, be easily dismissed. Now, however, the Cabinet has a chance to prove that the skepticism is unwarranted and that it can perform better than the previous one.

-- Bisnis Indonesia, Jakarta