President-elect Joko “Jokowi” Widodo describes the team set up under Rini Mariani Soemarno Soewandi as a transition team because its job is to prepare a smooth transfer of power from the outgoing President Susilo Bambang Yudhoyono administration later in October.
But a crisis-management center is perhaps a more fitting job description for Rini’s task force, given the uphill tasks ahead and the bold programs of action that need to be executed immediately to build confidence in the new government.
However it is measured, the fiscal situation the Jokowi administration will inherit will be quite adverse due primarily to the huge fuel-subsidy burden to be left behind by the outgoing government.
The new administration will be trapped in a severe liquidity crisis, unable to make any meaningful investment if it does not act immediately to significantly cut fuel subsidies because more than 80 percent of the total budget will be
taken up by personnel costs, debt servicing and amortization, fuel subsidies and transfers to regional administrations.
But cutting fuel subsidies without first putting in place a well-designed social safety-net program to protect the poor from the short-term, steep price rises could ignite widespread street protests and consequently social and political turbulence.
Hence, the first task of the Rini team is preparing a comprehensive social safety-net program within the draft 2015 state budget or implementation at the beginning of the 2015 fiscal year in January and building up a conducive public-opinion campaign for the painful energy reforms.
As Jokowi’s governing experience has been limited to the Central Java city of Surakarta and the capital city of Jakarta, he and vice president-elect Jusuf Kalla need to immediately implement confidence-building programs of action in such strategic areas as land acquisition for basic infrastructure such as roads, airports and seaports and power plants.
Instead of being embroiled in political bickering, scapegoating and blame games, it is now past the time for rhetoric and high time for swift action. It is the responsibility of the Rini team to thoroughly select top-priority programs for immediate execution that will have the biggest impact on building public confidence in the policy-making and implementing capability of the Jokowi administration.
Hence, the structure of Jokowi’s working office and the architecture of the upcoming Cabinet that the transition team will prepare should be designed for fast decision-making, yet with a high degree of transparency and accountability.
Put another way, the institutional mechanism of the president-elect’s working office should enable Jokowi and Kalla to provide effective leadership, and the Cabinet should be filled by ministers capable of providing the proper management and coordination of all reform measures.
One of the most important organizations that Rini and her team should prepare is the kind of a crisis-management mechanism directly under the president where well-coordinated action programs can be quickly decided and any problems in their implementation can be settled at the highest level.
The crisis center should serve also as a nerve or a war-room-like center to bring the political leadership face to face with the representatives of the business community and bureaucratic institutions at least once a month to frankly discuss and resolve any problems faced in the economic sector with the utmost sense of urgency.
Any issues related to economic activities such as stalled budget execution, land acquisition, port clearance for imports and exports, anti-business rulings issued by local administrations, smuggling and other crucial reform measures should be settled quickly at the highest level of the executive branch.
The basic rationale of such a crisis-management mechanism is that the management of an economic crisis should run like the emergency center of a hospital where fast decisions and concrete programs of action are much more important than bureaucratic procedures or rigidities, where problems are resolved by executive fiat on the spot.
It is the center where political resolve is translated into bureaucratic resolve as the personal presence of the president in the chair will keep the bureaucrats on their toes as they have to be ready with answers to the president’s questions.
Last year, Yudhoyono’s economic think tank, the National Economic Committee (KEN), also recommended the establishment of a special government-business task force to serve as a crisis-management center to cope with more pressing economic challenges.
Jokowi made the right choice by appointing Rini as the leader of the transition team. With her past experience as, among other things, a senior executive at Citibank Indonesia, chief executive officer of the widely diversified Astra International business group and trade minister under the Megawati Soekarnoputri administration in 2001-2004, Rini well fits the bill to lead the transition office.
Rini is fully aware that without new major investment in basic infrastructure the economy will become increasingly less competitive and less attractive to new investment in manufacturing.
Further down the line, without new investment the manufacturing sector will become less competitive because its obsolete plant and equipment will make it grossly inefficient, unable to produce goods of higher added value and will render its products unable to meet changes in market preferences.
But a crisis-management center is perhaps a more fitting job description for Rini’s task force, given the uphill tasks ahead and the bold programs of action that need to be executed immediately to build confidence in the new government.
However it is measured, the fiscal situation the Jokowi administration will inherit will be quite adverse due primarily to the huge fuel-subsidy burden to be left behind by the outgoing government.
The new administration will be trapped in a severe liquidity crisis, unable to make any meaningful investment if it does not act immediately to significantly cut fuel subsidies because more than 80 percent of the total budget will be
taken up by personnel costs, debt servicing and amortization, fuel subsidies and transfers to regional administrations.
But cutting fuel subsidies without first putting in place a well-designed social safety-net program to protect the poor from the short-term, steep price rises could ignite widespread street protests and consequently social and political turbulence.
Hence, the first task of the Rini team is preparing a comprehensive social safety-net program within the draft 2015 state budget or implementation at the beginning of the 2015 fiscal year in January and building up a conducive public-opinion campaign for the painful energy reforms.
As Jokowi’s governing experience has been limited to the Central Java city of Surakarta and the capital city of Jakarta, he and vice president-elect Jusuf Kalla need to immediately implement confidence-building programs of action in such strategic areas as land acquisition for basic infrastructure such as roads, airports and seaports and power plants.
Instead of being embroiled in political bickering, scapegoating and blame games, it is now past the time for rhetoric and high time for swift action. It is the responsibility of the Rini team to thoroughly select top-priority programs for immediate execution that will have the biggest impact on building public confidence in the policy-making and implementing capability of the Jokowi administration.
Hence, the structure of Jokowi’s working office and the architecture of the upcoming Cabinet that the transition team will prepare should be designed for fast decision-making, yet with a high degree of transparency and accountability.
Put another way, the institutional mechanism of the president-elect’s working office should enable Jokowi and Kalla to provide effective leadership, and the Cabinet should be filled by ministers capable of providing the proper management and coordination of all reform measures.
One of the most important organizations that Rini and her team should prepare is the kind of a crisis-management mechanism directly under the president where well-coordinated action programs can be quickly decided and any problems in their implementation can be settled at the highest level.
The crisis center should serve also as a nerve or a war-room-like center to bring the political leadership face to face with the representatives of the business community and bureaucratic institutions at least once a month to frankly discuss and resolve any problems faced in the economic sector with the utmost sense of urgency.
Any issues related to economic activities such as stalled budget execution, land acquisition, port clearance for imports and exports, anti-business rulings issued by local administrations, smuggling and other crucial reform measures should be settled quickly at the highest level of the executive branch.
The basic rationale of such a crisis-management mechanism is that the management of an economic crisis should run like the emergency center of a hospital where fast decisions and concrete programs of action are much more important than bureaucratic procedures or rigidities, where problems are resolved by executive fiat on the spot.
It is the center where political resolve is translated into bureaucratic resolve as the personal presence of the president in the chair will keep the bureaucrats on their toes as they have to be ready with answers to the president’s questions.
Last year, Yudhoyono’s economic think tank, the National Economic Committee (KEN), also recommended the establishment of a special government-business task force to serve as a crisis-management center to cope with more pressing economic challenges.
Jokowi made the right choice by appointing Rini as the leader of the transition team. With her past experience as, among other things, a senior executive at Citibank Indonesia, chief executive officer of the widely diversified Astra International business group and trade minister under the Megawati Soekarnoputri administration in 2001-2004, Rini well fits the bill to lead the transition office.
Rini is fully aware that without new major investment in basic infrastructure the economy will become increasingly less competitive and less attractive to new investment in manufacturing.
Further down the line, without new investment the manufacturing sector will become less competitive because its obsolete plant and equipment will make it grossly inefficient, unable to produce goods of higher added value and will render its products unable to meet changes in market preferences.
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The writer is senior editor at The Jakarta Post.
Vincent Lingga, The Jakarta Post, Jakarta | Commentary | Wed, August 06 2014, 9:19 AM
Vincent Lingga, The Jakarta Post, Jakarta | Commentary | Wed, August 06 2014, 9:19 AM
