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.