Sat, 23 May 1998

The Habibie team

President B. J. Habibie, fully aware of the odds being stacked against his integrity and credibility, tried his best to impress the nation with a core team of what he expects to eventually develop into good governance. But the Cabinet he announced yesterday, though not perceived as corrupt, collusive and nepotistic as the last Soeharto Cabinet, fell far short of what is needed to accelerate the overall reform process and to lead a paralyzed economy into a robust recovery.

Habibie tried to broaden his base of support to face the nation's worst economic crisis and to regain the public's confidence by reaching out to the two political parties -- Indonesian Democracy Party and United Development Party. He tried to remove the perception of nepotism and cronyism by tossing out such members of the previous cabinet as Soeharto's daughter Siti Hardijanti Rukmana, Gen. (ret.) Hartono, Mohamad "Bob" Hasan, Subiakto Tjakrawerdaya, Fuad Bawazier, Wiranto Arismunandar, Haryanto Dhanutirto, Abdul Latief and Sanyoto Sastrowardoyo.

But he failed to deliver efficiency. He maintained what the public sees as redundant cabinet positions such as the coordinating ministers for political and security, people's welfare and poverty eradication and development supervision. Still more discouraging is that Habibie reappointed to these posts such personalities -- Gen (ret.) Feisal Tanjung, Haryono Suyono and Hartarto -- whose major qualification is seen as simply their loyalty to Soeharto.

We also wonder why, given the dire condition of the state budget, Habibie maintained the posts of state ministers for women's affairs, tourism and arts, food and horticulture and population whose scopes of responsibility overlap with those of other ministers with portfolios.

The only bright element of the cabinet is the economic team and the full political autonomy Habibie gave to the central bank. He not only retained the best members of the economic team of the previous cabinet -- Ginandjar Kartasasmita, Tanri Abeng, Giri Suseno Hadihardjono, Kuntoro Mangkusubroto -- but also recruited Bambang Subianto as the new finance minister. Bambang, a career bureaucrat of the finance ministry, is well known for his integrity. He was appointed the chief of the Indonesian Bank Restructuring Agency immediately after its establishment in late January while he was still the director general for financial institutions. But he was quietly fired almost five weeks later for his tough stance in dealing with bad banks irrespective of the political connections of their owners.

Our biggest reservation about this economic team concerns the new minister of industry and trade, Rahardi Ramelan. The exclusion of Bob Hasan, the industry and trade minister in the previous cabinet, should greatly be welcomed because he was the complete symbol of crony capitalism, monopolistic and rent- seeking practices. But we wonder why Habibie should mar the otherwise impressive formation of the economic team by appointing Rahardi, one of his closest confidantes and an aggressive advocate of dubious high technology, to head such an important economics portfolio.

The most glaring shortfall in Habibie's Cabinet announcement was the complete absence of clear-cut political and law reform programs he will carry out. After all, he named his working team the Cabinet of Reform and Development. Hopefully, this was not deliberate neglect but simply a pending agenda he will soon set, given the severe time restriction he faced between his appointment to the presidency and the formation of the cabinet.

The greatest hurdle yet facing President Habibie is his own public image; he is perceived as too closely associated with the failings and notorious hallmarks of the departing president. Habibie, known for quirky economic theories and profligate spending in his years as research and technology minister, should have realized that right now he is not only short of political legitimacy, but is perceived as an antimarket personality who favors nepotism and crony capitalism. His family and close relatives reportedly control or partly own more than 80 enterprises. One of the first measures he took upon his election to the vice presidency in the middle of March was to appoint his own brother, J. E. Habibie, as the head of the Batam Development Authority.

All these are not the characteristics befitting a leader whose primary task is to establish integrity and credibility of his own and regain public confidence in the government. Public confidence is crucial for soliciting full cooperation and understanding on the part of the people, who will have to endure many hardships within the next two to three years at least before the nation's economy, already paralyzed, stabilizes and recovers.

We think President Habibie, before doing anything else, should start the process of gaining public confidence, not by asking his supporters to take to the streets to demonstrate allegiance to him, but by distancing himself from nepotism and crony capitalism. This requires Habibie to set a good example to his cabinet by publicly declaring his personal wealth, as audited by public accountants, and publicly announce the numerous enterprises which his family or close relatives control or partly own.