RI needs pro-reform cabinet to improve economy

RI needs pro-reform cabinet to improve economy

The rupiah remains weak and prices are skyrocketing,
triggering riots in several towns. Economist Emil Salim, who held
portfolios in three previous cabinets, discusses the necessity
for Indonesia to have a credible pro-reform cabinet to improve
the nation's economic and political condition.

Question: The government has introduced overall economic
reforms but why does the rupiah remain weak and why do prices
continue rising?

Emil: The rupiah remains weak because the implementation of
the reform measures, which are actually very good, has not been
smooth and consistent.

I see that some cabinet members in the last few weeks of their
tenure have halfheartedly implemented the reform measures. Local
administrations are also reluctant to abolish local fees as
required by the reform measures.

The government lost some of its credibility when it
backtracked on the previous reform package (November), for
example, by reviving the projects previously shelved or postponed
and then stopping again the same projects a few months later.

This indicates a strong battle between pro-reform officials
and those wanting to maintain status quo.

Meanwhile, supplies of essential commodities become scarce and
prices are skyrocketing because many traders and distributors,
feeling uncertain about the wild volatility of the rupiah,
temporarily halted their trading activities to wait for prices to
stabilize while some others speculatively raised prices to match
the changes in the rupiah exchange rate.

Q: You don't see any sabotage efforts?

E: There are a few cases of sabotage but in general, traders are
piling up goods because of the high degree of uncertainty.

Q: How do you see the recent rioting in several towns?

E: Social conditions are always vulnerable when there are massive
labor layoffs, while prices are rising steeply. Some riots might
have been ignited by certain parties for political goals but most
of them have been spontaneous due to frustration with the
difficult economic conditions.

Q: Do you see any attempt to divert the blame from the government
to the ethnic Chinese?

E: I am not happy with that. Such a move, if any, is an
irresponsible and futile move and that is cheap politics. Any
party should not use racial, religious or ethnic sentiments as an
agenda for political movements.

Q: Since the introduction of economic reform measures has not
effectively restored confidence in the rupiah, do you think it
necessary for the country to introduce political reform?

E: We do need political reform but we must be patient. We can
start the political reform by seriously implementing the economic
reform, which will eradicate the crony capitalism.

The 50-point economic reform signed in January by President
Soeharto and the managing director of the International Monetary
Fund, Michel Camdessus, will abolish monopolies, restrictions on
trade, nepotism in business and cartel-like organizations, which
have produced the current political power.

So, implementation of the economic reform would create a
conducive climate for changing the pattern of political power and
developing potential to create new political concepts.

From there, we will start the next step of political reform
by, for example, introducing a new method of recruiting members
of the House of Representatives through district-based general
elections. The new House members will then introduce new laws to
facilitate the democratization of the political system.

We cannot expect the introduction of pro-democracy laws from
the current House members, who have been recruited under the old
system.

Q: Why don't we start the political reform by establishing a
cabinet whose members are committed to reform?

E: We can do so if we can appoint pro-reform people in the next
cabinet, who will then initiate the introduction of political
reform. But the slow implementation of the economic reform
indicates that the power of the antireform club is very strong. A
few cabinet members are really in favor of reform but I wonder
whether they have groomed their cadres.

Q: Now that all the factions in the People's Consultative
Assembly (MPR) are apparently determined to reelect the incumbent
President Soeharto as the country's next president for his
seventh term, do you think the next vice president can play a
role in promoting political reform?

E: It depends on who will take that position. A vice president,
who gets his position from the MPR, will have a power to do so.
But I doubt the capability of the vice presidential candidates
already put on the table. I think Pak Harto read the reactions of
the people when the preferences were announced.

Q: You said recently that you would be ready if the MPR nominated
you as a vice presidential candidate. What will you do if you are
elected vice president?

E: I will push for the implementation of the economic reform to
eradicate crony capitalism. I will continue motivating ministers
to carry out the reform and supervise closely its implementation
until a clean and credible government is established. I will also
see to it that the cabinet is clean from corruption and
collusion.

Even if I am not elected vice president, I will continue my
fight for firm implementation of the reform through my teachings,
discussions, writing and non-governmental organization
activities.

Q: Do you think that President Soeharto will be able to carry out
Indonesia's leadership in the next five years?

E: We have no other alternatives. The facts show that the
factions in the MPR find it difficult to look even for vice
presidential candidates.

Q: Do you think the economy will improve after the election of
the next president and vice president in March?

E: It will depend on who will become the vice president and the
economic team in the cabinet. The market will react positively if
the cabinet comprises competent and credible personalities who
are not corrupt. (riz)