Soeharto's reforms

Soeharto's reforms

The most outstanding feature of last week's economic reform
package was not the content -- however drastic or sweeping it was
-- but the way it was announced. No less than President Soeharto
personally signed and delivered the letter of intent to the
International Monetary Fund, and then went on to explain the
grounds for these reforms, their outlines and consequences for
the nation. It was one of those rare occasions when the messenger
was far more important than the message he delivered.

This is not to belittle the content or significance of the
reforms. The elimination of monopolistic privileges and cartel
practices, and the phasing out of subsidies, were important and
crucial to save the country's economy, now teetering on the brink
of total collapse. They were the most extensive and drastic
measures introduced since the government embarked on the course
of economic reforms in the mid-1980s.

This is probably why Soeharto decided to take it on himself,
rather than leaving it to his economic ministers as in the past,
to deliver not only the good news, but the bad as well, to the
nation. It was a gallant act on his part to tell the people
directly about what they are up against.

By giving his personal stamp on these reforms, the President
denied fodder to critics and naysayers edging to shoot down the
reform messages as soon as they were delivered. In the past, they
had strong reason to be cynical because some promised reforms
never materialized, or they were implemented halfheartedly.

Soeharto has put his personal reputation on the line with
these reforms. He knows that his image, both at home and abroad,
is at stake. This is one reform package in which he cannot afford
to backslide, or even be seen as backsliding. Not that we have
any reason to suspect that he would.

To ensure the implementation of these promised reforms,
Soeharto has established an impressively high-powered council
which he personally heads. He appointed reputed veteran economist
Widjojo Nitisastro as secretary-general, and Fuad Bawazier, the
director general of taxation, as deputy secretary-general. The
council has three members; Minister of National Development
Planning Ginandjar Kartasasmita, Chairman of the Federation of
Domestic Private Banks A. Subowo, and Tanri Abeng, once rated as
the most expensive professional manager in the nation and now
president of PT Bakrie Brothers.

The council is entrusted with the task of ensuring the reforms
are carried out, of fine tuning them when the need arises, and of
working with the IMF representative to conduct a periodic three-
monthly review.

President Soeharto's personal involvement in the council
should ensure that these reforms do not meet resistance either
from within the bureaucracy or politically connected business
groups, both of which had often undermined or frustrated past
reforms. Hopefully, in the process, the council will deal with
corruption practices in the bureaucracy, which many believe are
at the root of some of the problems the nation is facing.

Soeharto's involvement in the council is also the clearest
signal the nation has had from him of his intention to remain at
its helm when his current term as president ends in March. So
much is at stake, not only for the nation but for his own
personal reputation, that he would not likely shirk
responsibility and abandon the reforms halfway. This fact alone
should serve to remove one of the uncertainties in investors'
minds.