Why RI sees double on IMF

Why RI sees double on IMF

By Gerry van Klinken

TARINGA, Australia (JP): Opinions expressed about the IMF on
the Internet version of many Indonesian newspapers over the past
several months fell into two broad groups.

The first group was rather skeptical of IMF efforts to save
the Indonesian economy from the crisis that began with the
currency slide several months ago.

The statements of this group came as no great surprise to me.
Opinions of the "go to hell with your aid" type were frequently
aired in discussion groups with students in Salatiga during the
1980s, when I taught at Satya Wacana Christian University.

For example, the famous psychic Ki Gendeng Pamungkas said: "I
think the speculators and the money mafia are a plot by American
spies. They want to undermine the government. I don't think the
IMF can do much good -- they will be met with lots of
demonstrations."

Gendeng Pamungkas' opinion might make some readers smile
because it sounds so naive. However, this group of observers who
reject, or at least doubt the IMF rules of the economic game, has
many more credible adherents.

Among them are Mubyarto, activists Noer Fauzi and Emmy
Hafield, businessman Sofyan Wanandi, former officials, including
Sri-Edi Swasono and, of course, more outspoken than any of the
others, Amien Rais.

Amien pictures the IMF as a noose in the hands of the
imperialists, ready to choke Indonesia by the neck.

This somewhat nationalistic group carries the mantle of
Indonesia's revolutionary history, and feels great solidarity
with the disadvantaged.

Unfortunately, it has been buffeted left and right lately. One
problem is that their kind of thinking is regarded as outdated by
many members of the new middle class.

They would like to see nationalistic values turned on their
heads. It is not capitalism that is the great evil and the state
our savior, they say. On the contrary, capitalism will save us
from poverty, while the state merely slows down our freedom to
acquire wealth.

Another problem is that economic nationalism of the socially
responsible kind (espoused for example by the Jimbaran group) has
unintentionally become a refuge for various monopolies and
nepotistic practices. Businessmen, like Probosutedjo for example,
often use nationalistic language, as does Sudwikatmono and even
(lately) Tommy Soeharto.

The second group feels much more positive toward the IMF
program. Who are they?

This group contains highly respected names, including
economists Kwik Kian Gie, Christianto Wibisono, Didiek Rachbini,
Dewi Fortuna Anwar, Laksamana Sukardi, Sjahrir, Faisal Basri and
Anwar Nasution.

Even though they realize that the IMF package might give rise
to protest from the lower layers of society, who bear the brunt
of increased unemployment during the adjustment phase, they are
convinced that the IMF reform program will improve people's lives
in the long run.

The globalist group argues for a more business-like
government, and feels that the global economy is not as malignant
as was once thought.

Of course, it is difficult to argue with the expert opinions
of this globalist group when they say that the IMF is offering
bitter but essential medicine.

Indeed, the nationalist group, for all its solidarity with the
poor, is not well equipped to talk the complex language of modern
banking. Nor does it have much to say about the corruption that
always seems to cling to nationalistic solutions.

And yet, I could not help thinking back to our discussions
over fried cassava on those cool evenings in Salatiga. Those
students were no experts on legal lending limits or the effect of
interest rates on growth forecasts.

But there was something valuable in what they believed in,
something often missing from the globalist agenda. Perhaps it is
not too grand to call it solidarity, or even love. What will
happen to the Indonesia we all love if this feeling should
disappear altogether?

I realized there was a serious debate shaping up here, and I
was surprised it had not yet become as sharp in Indonesia as, for
instance, it has become in the Philippines, Malaysia or Thailand.
A debate asking whether it is still possible (or even desirable)
to imagine a state enabling social equity in a globalized
economy.

The possible consequences of this debate are large. If the
disadvantaged feel themselves victimized by the global economy
and left behind by the middle class, the possibilities run to
social unrest, as Ki Gendeng Pamungkas feared might happen.

Dr. Gerry van Klinkenb edits Inside Indonesia magazine,
published in Australia.