|
Economy Clue To Megawati's Takeover Bid
by Kazi Mahmood for IslamOnline
JAKARTA, May 16 (IslamOnline & News Agencies) - While Indonesian President Abdurrahman Wahid seems resigned to his fate, awaiting an impeachment from the Higher House of Representatives (MPR) in June, Vice President Megawati Sukarnoputri is already considering drastic economic measures in the event of her takeover.
Megawati's party has been advised by a group of investors visiting Jakarta that the economy is an important tool and its ills should be addressed immediately if the country wishes to see an increase in foreign investment.
Sources in Jakarta say investment in Indonesia's industrial, building and construction, as well as manufacturing, sectors has seriously dipped to low ebbs since the start of the "reformasi" (reform) movement in Jakarta.
They noted that the reform movement was intense in the large capital city of the archipelago of 210 million people and it certainly affected business there.
Cash strapped Indonesia has literally been chasing after the International Monetary Fund (IMF) and World Bank (WB) for additional funding to help it gear its economy to stability.
Investors in Jakarta are of the opinion that Wahid's government faced too much criticism and played too much politics and allowed the economic situation to falter.
During the 1997 economic crash observers said the country's economy crashed to a historic low forcing the ouster of former president Suharto. They added that the economy recovered well under his successor, former president B.J Habibie, who helped in the consolidation of both the share market and the failing Rupiah, the currency of Indonesia.
Eighteen months after the fall of the technocrat and scientist Habibie, Indonesia's economy is now facing high inflationary pressure caused by the recent depreciation of the Rupiah.
The Bank of Indonesia (BI) said on Tuesday that the government's price control policy would also pose a threat and a great challenge to the monetary policy.
In a statement, Bank Indonesia said it would therefore continue with its prudent policy strategy in a consistent and disciplined manner to pursue predetermined base money target levels.
Observers who spoke to IslamOnline said they were amazed that only Megawati's party, the Democratic Party of Indonesia (PDI-P), was seriously considering ways on how to salvage the country's economy.
They said Wahid and most of his critics were only "politicking" on whether or not the President should be replaced.
"They have overlooked the economy. No one formulated any brilliant or simple ideas that could have saved the Rupiah from its steep downfall." Rajab Salim said.
He cited the BI's statement that inflationary pressures in the coming months would be high, adding that this will pose further problems to the already "suffocating" population. The BI also said the current unstable political situation may develop into a financial risk for the country.
In the meantime, the PDI-P has been working on a blueprint ready to be executed in case Megawati, its leader and supremo, gains power. The party has formulated a comprehensive economic strategy that it hopes will lead the country out of its worst crisis in over three decades.
Megawati has indicated she will not hesitate to take tough measures - including raising fuel prices - to restore international confidence in the ravaged economy.
The top economic priorities, the Business Times of Singapore wrote, would be the following:
Work with the International Monetary Fund (IMF) to outline a revised state budget;
Allow fuel prices to rise by removing fuel subsidies;
Revise the regional autonomy bill (which could be a contentious issue); and
Implement a host of social programs to lessen the impact of the economic crisis on the lower-income groups.
Megawati would aim at restoring investors confidence and rebuild strained relations with the IMF, which has suspended since December the disbursement of $400 million in fresh loans, complaining of Jakarta's inability to implement reforms set out in an agreed Letter of Intent.
|
