http://www.asiaviews.org/?content=153499ym32dddw4&headline=20061102012433
AsiaViews, Edition: 41/III/Nov/2006 | Archives Headlines Inching towards the third year AsiaViews, Edition: 41/III/Nov/2006 Reports on the economy in SBY-JK's two-year-old government are unsatisfactory. Their popularity is largely due to political achievements. TWO years have passed. And we see that President Susilo Bambang Yudhoyono and Vice President Jusuf Kalla continue to have a work rhythm of: one day, one thread; one year, one cloth. Some people may be patient. However, the majority of Tempo polling respondents, the small medium and largescale businesspeople in five cities are tired of waiting. They don't plan on voting for this couple in the 2009 General Elections. This attitude is obviously triggered by unkept promises. SBYJK rose to power riding on campaign promises. At the top of the government, since October 20 two years ago, it's proven that it is easier making promises than realizing them. SBYJK are not Aladdin who can ask the genie in a bottle to build anything overnight. Nearly midterm, many targets are far from reached. Senior economist M. Sadli accurately summarizes what is apparent in the work of the military man and businessman duet. "The Yudhoyono government's weakness lies in implementation, not in horizons or planning." In brief, evidence is more important than a mountain of promises. The remaining three years is not a long time to realize the beautiful public announcements from the campaign stage. Especially since the last two years are usually used to prepare to charm people for the next general elections. What becomes then of the fate of the promised improvements? Tempo explains, one by one. *** Economy is the hardest problem. As soon as the oil price broke through US$70 a barrel, that was the end of an era of cheap fuel for the people. The government's coffers were drained by large expenditures on subsidies. There was no choice. Oil prices went up twice last year. Today people must pay one and a half times more than previously. If the government didn't bravely increase it, construction would have ground to a halt. Total subsidies would have consumed onethird of the State Budget. "We would have become the largest communist country," said Vice President Jusuf Kalla. The irony is the majority of cheap petrol and diesel consumers are not the poor. Oil prices went up. Protests everywhere. But the government's budget was safe. A new problem emerged: costs of goods and services soared. Inflation figures rocketed, breaking through the limits for the past four years. People screamed. The government responded by dispersing direct cash assistance funds to the millions of poor. Unfortunately, due to miscalculations and rampant assistance misappropriations-plus prices of rice that never go down-the noble efforts weren't completely successful. The direct impact: the number of poor people went up. During SBY's second year, the numbers who hit rock bottom were more than the previous year's. Without drastic changes in performance, meeting campaign promises of elevating more people to a better standard of living seems difficult. Also hit by oil prices is the growth garget. In the past two years the government's target of 6 percent wasn't reached. Bank Indonesia also estimated that the government's achievements are slightly below target. Obviously this is not as stupendous as the 6.6 percent that was bragged about in campaign forums. When the figures were uttered, M. Chatib Basri, economist from University of Indonesia who is now in the government, cautioned that they would not be easy to reach. At least investment funds of Rp1,100 trillion would have been needed for the next five years. Actually, at that time investments coming in were only at around 30 percent of the required amount; certainly hard enough to find the balance during SBY's fiveyear government. Chatib, today expert staff to the Department of Finance, has conditions. Serious efforts must be made to encourage investment climate improvement for the business world. What are they? Straightening out labor issues, certainty of laws, a clean government, regional autonomy and infrastructure provision. Conditions that are hard to meet. Presidential Instruction No. 3/2006 on Policy Package on Investment Climate Improvement is only 8 months old. Even that wasn't smooth. Plans to revise Manpower Law No. 13/2003 came to a halt after thousands of workers protested. Regional autonomy is full of overlapping regulations. Businesspeople are irritated because bribery and illegal levies only "took a break" for three months after SBY came to power, and then returned. Worse, the illegal practice is widespread in the regions. "This may be the price of democracy," said a businessperson halfjokingly. Infrastructure is no less convoluted. The Indonesia Infrastructure Summit, held last year, was crowded with domestic and foreign investors. However, when it was over, it was as if it was never held. To reach the growth target, however, requires stupendous infrastructure development funds. It's no wonder if Indonesia's economy until today seems to be inching forward like a snail. The consequences are obviously serious: an explosion of unemployment. SBY's target of reducing half of the open unemployment within five years of 10 percent of the number of workers is difficult to reach. Even worse, February data showed that the 10 percent threshold had been exceeded. What a bind. To absorb unemployment, growth of more than 7 percent is needed. Even this is based on an old elasticity measurement of labor absorption: for every growth of 1 percent, 400,000 unemployed people will find work. A recent study shows that for every economic growth of 1 percent, only 200,000250,000 people will work. If the new elasticity figure is used, economic growth must be higher. It may be double SBY's target. "It's obviously impossible," said Chatib Basri. *** Most troubled by the situation are the businesspeople. Their voices are reflected in the results of Tempo polling and Insight Asia in Medan, Jakarta, Semarang, Surabaya, and Makassar. Respondents chosen were small, medium and largescale businesspeople. Most complain about the worsening business climate and rampant illegal levies. They give a low score on the cabinet's performance on job creation, overcoming unemployment, poverty, and oil price management. The economic team's performance is under close scrutiny. Four of the five with the worst performance come from this team. However surveys by Danareksa Research Institute and the Indonesia Survey Institute (LSI), with the public as respondents, paint a slightly different picture. Danareksa, which contacted 1,700 respondents in six cities, discovered that the customer trust index on SBYJK's government is higher than the MegawatiHamzah Haz and MegawatiAbdurrahman Wahid eras. LSI discovered the public's support for SBY, which dwindled until March of this year due to oil price increases, is climbing again. The survey shows that, seven out of 10 respondents were satisfied with SBYJK's performance. The reason is the recovering macroeconomic indicators. Inflation and the rupiah exchange rate are considered stable, interest rates are going down. There is hope that economic growth until the end of year will be better than last year's. Nevertheless, LSI's survey reported that the cabinet economic team's achievement is only "soso," it doesn't reach the "bad" category. SBYJK's popularity is helped by their success in overcoming issues in separatism, communal conflicts, drugs eradication, corruption and public order creation. The ministers in political and security affairs are considered to be good by the public. Therefore, what President Yudhoyono needs is the courage to take a firm decision, quickly. Accelerating national economic growth must rapidly be pursued, considering he only has three years left. If necessary, to borrow Sadli's opinion, replace several ministers. An important recipe for economic report improvement, also the future of SBY's political career himself. Facts and figures 155 percent A total of two oil price increases in 2005. 250 trillion Annual subsidies if oil prices hadn't gone up. 17 percent Inflation figures after oil price increases in 2005, the highest in four years. 39 million The number of poor people in March 2006, 3 million more than at the beginning of SBY's term. Campaign promise: 18.7 million in 2009. 6.6 percent SBY's economic growth target during campaigns. Megawati set it at 6.8 percent. Target after SBY came to power 6 percent. Last year it was at 5.6 percent. This year's estimates are not much different. 11.1 million Unemployment figures up to February 2006. 750 trillion Lack of investment funds for a growth of 6.6 percent. Total required Rp1,100 trillion until 2009. Received so far only Rp350 trillion or 19.7 percent of our gross domestic product. 42 percent Percentage of businesspeople who will not reelect SBYJK in the 2009 General Elections, according to Tempo polling. 1,400 trillion Funds for infrastructure development for a growth of 6.6 percent. 67 percent Public satisfaction level over SBYJK's performance according to LSI survey. In November 2004 it was 80 percent, slid to 55 percent in March 2006 [Non-text portions of this message have been removed] Post message: [EMAIL PROTECTED] Subscribe : [EMAIL PROTECTED] Unsubscribe : [EMAIL PROTECTED] List owner : [EMAIL PROTECTED] Homepage : http://proletar.8m.com/ Yahoo! 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