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.