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)