Threats to reform

Threats to reform

The miserable failure of the government in preparing the
people for the increases in fuel and utility prices, and in
creating a social and political environment conducive to these
painful measures, could affect its ability to make the additional
reforms that are badly needed to repair the economy.

No matter how the government manages to placate the nationwide
protests against the utility price hikes, its decision-making
procedures to resolve the economic crisis will only become more
complex.

Yet, more challenging is that the political environment for
making tough policies will become ever more demanding, as the
House of Representatives appears no longer be satisfied with
simply taking legislative initiatives and drawing up general
directives on how the government should run. From this point
forth, the House would likely insist on delving into the nitty-
gritty of each and every executive action.

Such a situation has actually been expected in a democratic
and decentralized Indonesia. Gone are the days when policies
could simply be decreed and implemented under the sole command of
the president. Making decisions and policies should now be based
on a national political consensus. This is what democracy is all
about.

Policy-making that is based on a national political consensus
is deemed to be a better process, as it lends transparency and
national ownership to important, if painful, measures. National
ownership makes policies much more palatable to the general
public as they do not smack of intervention from, let alone
directives by, foreign governments or institutions such as the
International Monetary Fund.

The problem, though, is that the country is still in the midst
of a multi-dimensional crisis which has now lasted five
consecutive years. A crisis in whatever sector requires quick,
firm decisions.

There is, for example, utmost urgency in making decisions on
asset recovery, corporate restructuring, legal and civil service
reforms and privatization, because these are crucial for
sustaining recovery and securing fiscal sustainability.

The large number of House members who have joined the protests
against the price hikes, which had actually been exhaustively
debated and finally approved by the House within the law on 2003
State Budget, reflects either their complete ignorance of the
implications of the policies, or their frustrations that perhaps
they had been misled by the government.

This could drive the legislative assembly into overzealous
control of the government's executive branch to the point of
blurring their division of labor and stifling reforms, to the
detriment of economic recovery.

The decision-making procedures for the price hikes have, in
fact, fulfilled the democratic process, taking into account the
shortcomings inherent within the learning process being
experienced by an emerging democracy like Indonesia.

The economic rationale for such tough measures has also been
very clear. That the debates between the government and the House
on the price hikes did not go into technical details is simply
normal, as the implementation of the increases should be the
responsibility of the government. Tying too many details and
specific figures to particular economic measures amid the rapidly
changing conditions could lead to executive inertness.

It is the government that should primarily be blamed for the
public's furor over the price hikes. The government is utterly
ignorant of the basic fact that a policy can never be introduced
in a vacuum, and that a proper sense of justice is key to a
successful introduction of such painful measures as price hikes
in basic needs.

The government also seems exceedingly naive in not realizing
that within a democracy, policies, notably those that demand
sacrifices from the general public, cannot simply be decreed but
must be "sold" through effective communications and adequate
preconditioning.

The government, in coping with the raucous rallies against the
price hikes, should zero in on correcting those grave mistakes
that have turned into a national controversy what had
democratically been agreed upon as measures necessary to improve
the economy.

On the other hand, however, the management of the economic
crisis would be debilitated if the uproar over the price hikes
prompts the House to politicize any economic policies proposed by
the government.

The House would also be grossly misguided if it harasses the
government with excessive demands for minute technical details on
its policy measures, intervening in every executive action or
transaction.

Such overzealous control, while failing to establish good
governance, could instead slow the pace of reform.