White Paper: Perfect remedy or quixotic ivory tower fantasy?
White Paper: Perfect remedy or quixotic ivory tower fantasy?
Dadan Wijaksana, The Jakarta Post, Jakarta
Economists cautiously praised on Wednesday the government's
economic package laid out in its White Paper, saying the package
was comprehensive but still lacked focus due to the sheer number
of programs.
They also said the White Paper showed some inconsistencies.
"Overall, the program is good, comprehensive. What's still
lacking is focus: Which of the programs are considered urgent,
important and, as such, should be prioritized," Raden Pardede,
analyst at Danareksa Research Institute, said during a seminar
here on Tuesday.
The seminar, sponsored by the Centre for Strategic and
International Studies (CSIS), was aimed in part at publicizing
the economic reform targets set out by the government in the
document, which was issued last month to support its decision not
to extend the International Monetary Fund (IMF)'s special program
due to end later this year.
The package covers three main areas: to maintain and continue
pursuing macroeconomic and fiscal consolidation; to continue the
financial sector reform drive; to increase investment, export and
employment opportunities.
All these goals were broken down into certain policies and
targets to be met over the next 18 months.
While generally welcoming the package, Raden cautioned the
government about a number of possible impediments.
Not only because it lacks focus, but the package is also
sometimes "inconsistent" as it fails to address what measures to
be taken if the government fails to meet the targets, according
to Raden.
Raden cited the establishment of the financial safety net,
which under the White Paper, the government was to complete by
September this year. However, the plan never materialized.
"How do we measure things like this?," he asked.
He also questioned how the government would handle targets
that required certain legislation to be passed, such as the
amendment on the Bank Indonesia Law and the establishment of a
Financial Service Authority Institution (OJK).
The legislation process is done by the House of
Representatives with a completely different agenda and timetable
than the Cabinet. Thus, it is hard for the government to achieve
those targets without cooperation from the House.
Meanwhile, Chatib Basri, an economist from the University of
Indonesia, emphasized that it would be important for the
government to strengthen the role of the Investment Coordinating
Board (BKPM) if the country wanted to revive investment, the
third are discussed in the White Paper.
According to the White Paper, in order to boost investment,
the government would streamline investment and trade regulations;
boost legal certainty by revising the bankruptcy law and
overriding policies issued by provincial or district
administrations that inhibit investment; rehabilitate and develop
infrastructure; and improve transparency in the public sector.
Chatib admitted such programs were good, but he said they
would not be very effective if the current role of BKPM was not
strengthened.