RI 'should pay more attention to economy'

JAKARTA (JP): Indonesia should pay more attention to the economy because that is where most future challenges and threats lie, prominent military thinker Rudini said yesterday.

"Discussing future economic challenges is more relevant today than talking politics," the retired Army general and former home affairs minister said.

"This doesn't make politics less relevant but it has to be discussed within an economic context," Rudini said during a discussion with military leaders, thinkers and journalists.

The meeting, the first of its kind, was organized by the Armed Forces' chief of sociopolitical affairs, Lt. Gen. Yunus Yosfiah.

The three other speakers were military thinker Sayidiman Suryohadiprojo, Giri S. Hadi Hardjono from the Strategic Industries Management Agency and Bennett Silalahi from the Indonesian Management Development Institute.

Rudini said politics was closely related to people's psychological needs which would take time to satisfy. But, economics was tied to physical needs which had to be met quickly.

"While we all agree on the need for democracy, (the development) is a lengthy process," he said.

There was a growing demand from the people to speed up the process, he said. But the government was moving cautiously because, based on the experience of former communist states, political reforms could lead to national disintegration.

Rudini, who now heads the Indonesian Institute for Strategic Studies think tank, said the democratization process in a traditional and rural society like Indonesia would be painfully slow.

"Democracy cannot be imposed," he said. "What we can do is to speed up the process by accelerating the transformation from a traditional and rural society into a modern and industrial society.

"As long as that is not achieved, then we will simply have to be patient."

Quoting former Singapore prime minister Lee Kuan Yew, Rudini said: "Prosperity first and then democracy."

Sayidiman, a former governor of the National Defense Institute, also underscored the need for changes in Indonesia before democracy could flourish.

"Democracy can develop only if people have the means and capability to move with the changes," he said, recalling that democracy started in Europe after people were prosperous enough to challenge the church and the feudal rulers.

Sayidiman, also a former Indonesian ambassador to Japan, said political development in Indonesia was being pulled by two extremes: the process of political radicalization which tends to be destructive -- like the development of the now outlawed Democratic People's Party (PRD) -- and the preservation of the current status quo.

Rudini said ignorance of the economy meant the nation was unprepared for the present currency crisis.

He said Indonesia was caught off guard because it had been buoyed by international praises, including the World Bank's comment that the economic fundamentals were strong.

"No one had questioned whether those fundamentals were really strong ...," he said.

"Had politicians known the real conditions of those fundamentals, we would have been more prepared to face the economic upheavals that we have seen since July 11.

"Then there would not be any need to make George Soros a scapegoat," he said, referring to the American currency trader.

He said politicians should pay greater attention to economic indicators such as the current account deficit, foreign currency reserves from the trade surplus, debt service ratio, banking and monetary conditions, bad debts and interest rate changes.

These indicators could inform politicians if the economic fundamentals were vulnerable, he said, adding that most experts now agreed that the fundamentals were weak.

Silalahi dismissed the official claim that the currency crisis in Indonesia had not been as bad as in Thailand.

Thailand had a per capita income of more than US$5,000 while Indonesia had only $1,250, he noted.

"Thais fall into a cushion, while we fall onto a hard floor," Silalahi said. "I say we are much worse off than the Thais."

The size of Indonesia's economy, at $0.24 trillion, was only comparable to the assets of the American oil giant Exxon Corp, not the economies of the United States' at $5.6 trillion, China at $4.8 trillion and Japan at $2.4 trillion, he said.

With economic liberalization, Indonesia would find it tough to compete with these giant economies, Silalahi said.

"For us, the holiday is over. From now on, we need to bend over backward to prepare ourselves for the competition." (emb)