Skepticism confronts economic team

Skepticism confronts economic team

JAKARTA (JP): Analysts expressed their concern on Tuesday on
the economic team in the new Cabinet, saying that some were
appointed more out of political consideration rather than
capability.

Economists expressed reservation, particularly on newly
appointed Minister of Finance Bambang Sudibyo and Minister of
Trade and Industry Yusuf Kalla.

"It's not convenient ... There's too much political compromise
here," Budi Hikmat, an economist at PT Bahana Securities, told
The Jakarta Post.

"The selection of economic ministers should have been based on
efforts to recover from the economic crisis, not for political
compromise," he said.

Budi said newly elected President Abdurrahman Wahid and Vice
President Megawati Soekarnoputri should have put more credible
and professional people in the economic portfolio because the
country was facing a serious economic crisis.

"I can understand that Abdurrahman and Megawati have to make
compromises, but at least certain (economic) posts should have
been given strictly to credible people," he said.

Budi said the immediate response on the stock market was
negative as could be seen from the Jakarta Stock Exchange
composite index dropping by 0.5 percent to 594.25 on profit
taking following the Cabinet announcement.

The rupiah ended the day almost unchanged at Rp 6,785, which
was a little higher than Rp 6,920 late on Monday.

"The market sees too much political compromise," he said.

Indonesia announced its 35-member "National Unity Cabinet" on
Tuesday.

The Cabinet was formed in such a way to reflect all the
political forces within the country which is facing a multiple
crisis, including threats of disintegration and economic crisis.

Political experts said Abdurrahman and Megawati had to pay
political favors to certain groups which helped them ascend to
national leadership.

The new economic ministers are Coordinating Minister for
Economy, Finance and Industry Kwik Kian Gie, Minister of Finance
Bambang Sudibyo, Minister of Trade and Industry Yusuf Kalla,
State Minister for Investment and State Enterprises Laksamana
Sukardi, Minister of Mining Lt. Gen. Susilo Bambang Yudhoyono and
Agriculture Minister M. Prakosa.

Economist Faisal Basri said he was not fully satisfied with
the new economic team of the Cabinet but he could understand the
limitations faced by the President in forming it.

"That's the maximum President Abdurrahman can afford since he
had to make compromises," said Faisal, who is also the secretary-
general of the National Mandate Party (PAN).

He gave a thumbs up to the appointment of Kwik and Laksamana,
pointing out that the two would play leading roles in crafting
the country's economic policy.

He said although the market welcomed the selection of Kwik and
Laksamana, many doubted the competence of Bambang, the newly
appointed finance minister.

"Team work is necessary to handle economic and financial
affairs. Will the duet of Kwik and Laksamana make a good team
with Bambang," Faisal said.

Bambang, an academician from the Yogyakarta-based University
of Gadjah Mada, is head of the economic compartment of PAN, the
political party of Amien Rais, the speaker of the People's
Consultative Assembly (MPR).

Many believed that Amien and another key official at PAN, Fuad
Bawazier, a former finance minister in the previous Soeharto
administration, lobbied Abdurrahman to accept Bambang.

Budi also said the appointment of Jusuf Kalla was more of a
political compromise in a bid to appease the rebellious movement
in the eastern part of Indonesia.

Jusuf, a businessmen originating from South Sulawesi, is seen
as a representative of the eastern part of Indonesia, in which
several separatist movements in the region's provinces have
started to campaign for independence.

Jusuf's business vehicle is the Bukaka Group, a local
conglomerate operating in various sectors.

"Jusuf has a lack of vision for leading the country toward the
globalization era," he said, adding that Jusuf lacks an
international networking ability to help push the country's
export industry.

Budi also questioned the status of the bad debts owed by
Jusuf's company, Bukaka, to the Indonesian Bank Restructuring
Agency (IBRA).

"This could create a conflict of interest," he said.

Budi also questioned the appointment of Susilo Bambang
Yudhoyono, a top military official, as the new mining minister.

"Can he match the previous minister, who I heard is well
accepted in the oil and mining community because of his good
vision," he said, referring to former mining and energy minister
Kuntoro Mangkusubroto, who tried to abolish the monopoly status
of the state oil and gas firm, but had so far failed.

Meanwhile, Umar Juoro, an economic adviser to former president
B.J. Habibie, said although the current Cabinet members lack
experience, they should gain credibility because they are not
tainted with corruption.

Credibility was the biggest problem of the previous
administration in implementing the economic programs.

"What they need is good team work to create effective
programs," Umar said.

He was confident that the economic team could work together to
lift the country out of its economic crisis which started in the
middle of 1997.

David Chang, head of research at PT Trimegah Securities, said
that the new Cabinet should gain the market's confidence,
particularly because of the positive view taken on Abdurrahman
and Megawati.

"I think investors are starting to have confidence because
Abdurrahman is a good president," Chang said, adding that the new
Cabinet team was good enough because it does not include former
ministers with indications of corruption.

Abdurrahman was under pressure not to include former ministers
from the previous Soeharto or Habibie governments in the new
Cabinet on the grounds that most were corrupted.

But Abdurrahman's aides insisted that not all were
corrupt. (rei/jsk/03)