UI economic policy recommendation is too late: Analyst

The Jakarta Post, Jakarta

One thing is certain from the ongoing presidential election process; whomever emerges victorious will face a formidable task in curing the country's economy.

Taking that into account, a group of 34 economists from the University of Indonesia have offered to give the president a set of guidelines for an economic recovery program for the next four to eight years.

The recommendations, launched last week, centered mostly on six economic pillars; an investment-boosting strategy, a poverty alleviation, an economic development blueprint, economic growth acceleration, clean governance, synergy in policy between central and regional governments.

All were outlined in a book entitled Economic Issues and Strategic Policy Recommendations.

But one analyst said that the policy recommendations had come too late.

According to Aditiawan Chandra, the dean of UI's Economics Department who leads the team, the proposal was made upon learning that the economic platform set out by all five presidential candidates was insufficient to deal with the huge problems the next government would be facing.

"The vision and mission of these candidates seem to be dedicated merely to campaigning. Their programs are short-term, and not 'down to earth'.

"This recommendation looks also at the medium-term and long- term -- from five to eight years -- not just the short-term," Aditiawan said.

Aditiawan added that, as shown by previous cabinets, the government always seemed to start losing direction after the first 100 days in office as a result of "short-term minded" economic platforms.

While the economy may only grow by 5 percent to 6.3 percent in the next five years, but the team said that if their agenda was properly carried out, the next government could lay sound foundation to overcome economic challenges.

Based on the team's calculations, if the economic agenda stayed on track, the government could reduce the poverty level to about 7 percent by the end of 2009 as compared to around 9.5 percent at present.

Macroeconomic stability would also be maintained with the inflation rate at 3 percent to 5 percent and debt to gross domestic products (GDP) ratio of below 40 percent.

Meanwhile, asked to comment on the recommendations, economist of Bank Mandiri Martin Panggabean said he was not too impressed with the plan, saying it as a bit too late.

"First of all, the timing is bad. If they really want this to be adopted by the next government, why didn't they publish this several months ago, which would have been made it easier for the candidates to adopt it into their own economic platforms," Martin said on Sunday.

"Now, the candidates already have their own economic teams, and their economic platforms. The recommendation from UI suggests that the economic platform from all the candidates were not credible, which is not entirely true."

"I also regret that they had excluded the agenda on agricultural sector, which should in fact be the main target if we want to eradicate poverty and boost growth," Martin said.

Eyebox

Economic Pillars from UI

1. Prioritize investment growth, notably in real sector. 2. Poverty alleviation through the development of human resources and extending economic access to poor families. 3. Blue print on economic development, including on the industrialization, natural resources and energy, human resources, employment both through the state budget and non-state budget financing. 4. Acceleration in economic growth by strengthening the country's industrial competitiveness and productivity. 5. Boosting clean governance, creating synergy with regions in tax system and reducing the high cost economy 6. Creating synergy under the regional autonomy.