The Assembly and economic recovery

The Assembly and economic recovery

Sri Mulyani, Economist, Atlanta, U.S.

The Annual Session of the People's Consultative Assembly (MPR) is
now over and this convention of the country's highest body --
attended by the people's representatives -- has not left any
meaningful marks for the recovery of the country's economy, which
has stood still since the onset of the economic crisis.

The crisis, which began in 1997, has brought about radical
changes in Indonesian politics: Four presidents in all and the
new "ferocious" attitude of the MPR and the House of
Representatives (DPR), which used to be merely rubber stamp
institutions.

These dramatic and radical changes are not taking place
without reason. The political changes reflect the country's
requirement to rebuild a healthier political process, where
"checks and balances" become the mainstay.

This is a change in direction to the very dominant -- close to
absolute -- power of the presidency during the New Order regime,
resulting in various distortions that were detrimental to the
nation and in contrast to the public's sense of justice.

A more balanced and mutually controlling political process
requires an institution that is itself more balanced and of high
quality. However, such institutional improvements have not
occurred in the past few months or years. Both institutions
greatly lack the capacity to execute proper and credible power.

There is no institution and supporting staff of good quality
that are paid enough to prepare policy materials that are
accountable to the public. In most of the consultation forums
with ministers or other institutions, the quality of the
questions posed by the representatives are yet to be related to
policy strategies and specific policy backgrounds that can be
debated with reasonable quality.

Sometimes the questions are irrelevant, without having any
clear objectives and are often personal without relation
whatsoever to the policy in discussion. Both institutions, the
DPR and MPR, with their newly required power, nowadays seem to be
highly excessive in the use of such power.

The power, which should be better used to improve the
political process and the quality of policies, tends to be used
more for personal and group interest. Many reports have shown how
the members are more occupied with trading this new power than
thinking about rebuilding the nation.

Dealing with the economic crisis, which has caused political
changes, needs a clear and firm attitude as well as competent
commitment from the existing political institutions.

This requirement has not been fulfilled, because the country's
institutions, which should be balancing their power for a healthy
and effective administration, are blocking and sabotaging each
other to obstruct policies.

Worst of all, it can mostly be attributed to the interests of
certain groups. Many cases serve as clear examples. For instance,
is the government's commitment to sell assets under the
Indonesian Bank Restructuring Agency (IBRA) hampered by its own
ability to execute a clean transaction or has it been obstructed
by the DPR's veto, which has intimidated economic ministers?

The IBRA, which should have been the government's effective
arm in solving the source of the banks' crises and in
transferring assets as well as settling debts, has become
impotent and the target of criticism and ridicule by various
political institutions.

Many are also fond of politicizing the privatization issue, as
their interest is in maintaining the state corporations to remain
cash cows for their own benefit.

As a result of the economic crisis and after adopting a
democratic system, the government has become a weak institution.
The power in the hands of the government and the president remain
immense according to the 1945 Constitution, which is now being
revised by the DPR.

However, the government's authority has reached its lowest
point and it has lost the faith of the public, both due to the
abuse of power during former president Soeharto's era as well as
to the failures of his successors in managing power credibly and
respectably.

The Bank Bali scandal surrounding former president B.J.
Habibie and the Bulog (State Logistics Agency) scandal, plus the
ineffectiveness under former president Abdurrahman Wahid have
further paralyzed the government.

Under President Megawati Soekarnoputri, the government faces
similar tests. Although her Indonesian Democratic Party of
Struggle (PDI Perjuangan) has a larger electorate and a better
opportunity to realize a more effective government, it does not
guarantee success.

The government is still nervous in executing its decisions and
commitments due to the dominant self-interest of groups as well
as the high exposure of power by the DPR, whose limits are not
yet clear.

The government needs a clear and firm political umbrella to
enable it to execute power and decisions consistently and with a
sense of responsibility.

To solve the economic crisis and to rebuild the country's
economy, a clear political direction is required -- one that has
"explicit roadsigns" from the country's highest institutions,
like the MPR.

This is very important, because to build the economy and for
the economy to recover, many difficult and unpopular decisions
have to be made, such as reducing subsidies, or the selling of
IBRA's assets and the privatization of state corporations, which
often treads on the toes of certain groups, though benefits the
general public.

However, the recent MPR session did not concentrate on finding
solutions to our crippled economy.

The MPR may have thought that problems like the economic
crisis are to be tackled by the DPR, which does not possess any
guidelines on how to handle the predicament.

In materials prepared by the ad hoc committee and in the
discussion of the MPR's decisions more attention was focused on
revision to the 1945 Constitution, especially Article 33. The
discussion was, however, irrelevant to the realistic and basic
needs of economic sustainability and the nation's survival.

In the absence of attention given by the highest institutions
for the provision of a crystal-clear political umbrella to solve
the nation's most vital problems, there is little that we can
expect in terms of economic recovery.