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 One problem is that their kind of thinking is regarded as outdated by many members of the new middle class.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.