| BUSINESSWEEK ONLINE : SEPTEMBER 11, 2000 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN BUSINESS
A Talk with Rizal Ramli (int'l edition) The Coordinating Minister for Finance discusses his plan for stabilizing the financial sector and restoring investor confidence Respected Indonesian economist Rizal Ramli was named Coordinating Minister for Finance & Economy in a sweeping Cabinet reshuffle in late August by President Abdurrahman Wahid. Although he was a compromise candidate for the powerful post, his appointment was greeted as a pleasant surprise. By all accounts, Ramli is a prizefighter fit to face the political challenge of getting Indonesia's economy back on track. Before earning his doctorate in economics at Boston University in the early 1980s, Ramli spent a year in an Indonesian jail for writing a "white paper" that exposed the failings of trickle-down economics in a kleptocracy. In the 1990s, Ramli ran an independent consultancy in Jakarta that published studies linking Suharto family investments with glitches in Indonesian economic indicators. Ramli also has a proven track record for producing results as chairman of the National Logistics Agency (known by its Indonesian acronym Bulog), where he has sacked 80 managers for corruption and gathered evidence for the Attorney General to prosecute his two predecessors for corruption. Singapore Bureau Chief Michael Shari interviewed Ramli on Aug. 25 in Jakarta at his spacious Bulog office, which he still officially runs because he hasn't been replaced yet. Edited excerpts of their conversation follow: Q: How did you get your new job? A: I've known President Gus Dur [a nickname for Abdurrahman Wahid] for a long time, and Vice-President Megawati, especially during the last year under Suharto, because we all wanted Suharto to get out of the presidency. And since then, we have maintained strong personal relationships. Q: How will you coordinate with Megawati? A: By the end of each Friday, we expect all economic ministers to submit the major issues that are important. My staff is going to work over the weekend to select the top several issues.... On Monday morning at about 8 o'clock, I and Coordinating Minister for Politics & Security Bambang Yudhoyono are going to sit with her and report...the important issues, from our personal judgment, and ask for her personal judgment. And by 10 o'clock, we will have a separate meeting of the ministers with economic, political, and security portfolios, for about two hours or so. And after that, the three of us will have lunch, during which we will review the results of the meeting. And then, [Megawati] will report to the President. Q: What's Megawati's authority in this process? A: Well, she gives her input in the discussion, and she will show a preference for some of the policy suggestions. But she will also chair the full Cabinet meeting, which is every two weeks on Wednesday. Q: Does she have the authority to make decisions, or is she just a messenger to convey the results of meetings to the President? A: You have to look at this as teamwork. The Vice-President and President are a duo on a strategic level. Q: What's your game plan for the economy? A: If you look at the real numbers, the real numbers are not that bad. GDP is expected to grow this year by 3% to 4%. Consumption spending is on the rise, like for example increasing motorcycle sales, which reflect the lower-middle-class demand. And electricity consumption is also on the rise, despite price hikes. But all these good things in real numbers are not reflected in the financial sector, especially the rupiah rate and the equity market. Most of it is the perception game. And the last Cabinet was not coherent enough in its communication to the public and the investors. Q: Why wasn't it coherent? A: Because some ministers were bickering in public. There were so many issues. Some of them were small issues, but still they confused the public. One [minister] says the budget is a problem. The other says no it's not a problem. Q: How would you rate the performance of your predecessor, Kwik Kian Gie? A: He's a man of integrity. He worked hard. And I thank him for his hard work. Indonesia is already at the early stages of recovery. My job is to accelerate the process. Q: What are your most urgent priorities? A: First, we should help stabilize the financial sector by increasing confidence, by having a coherent policy. And that can be done, because this team is now a solid team. I know each of them individually. So coordination can work at both the formal and informal levels. Second, we would like to push rural-infrastructure projects to create jobs in rural areas and push up rural wages to provide the basis of social-political stability. We're going to have a major initiative on small- and medium-[size] enterprises that have proven track records, so it's not going to be a charity program. Third, we are going to push exports. Q: How will you raise exports? A: During the past six months, it has been a consumption-driven recovery, essentially. We will push exports further for a couple of positive factors. One, there's excess capacity in the industry of about 40%. Second, after the recapitalization of the banks, most of the banks have excess liquidity. Third, the rupiah rate is competitive. Combining all these three factors and having a proactive Trade Minister, Luhut Panjaitan, will enable us to push export as the second engine of recovery. And, if we are able, to complement consumption. If capacity utilization increases from about 60% now to about 80%, then I do believe foreign investors are going to look at Indonesia more seriously. Q: What's your next priority? A: Accelerate the process of privatization and asset disposal. We concentrate too much on selling. We are being advised by the International Monetary Authority to sell the banks. But at this stage, the banks are not that sexy. We should start first with the sexy sectors. What are they? Telecommunications, plantations, transport, hotels, and tourism. Q: Aren't you supposed to liberalize the telecom sector next month? A: Yes, but we still have to discuss that.... We would like to push for a restructuring of the telecoms industry, which would start with [domestic telephone utility] Telkom and [long-distance telephone utility] Indosat. Then we'll create an independent telecommunications board, so the process of policy and tariff setting is not politicized. And after that, we're going to sell, on a competitive tender, Indosat to foreign majority ownership. Q: So you're going to create a telecoms regulator? A: Yes. Q: And how long would that take? A: Oh, come on. Q: It would take an act of parliament, right? A: Yes, but I'm not ready to tackle a schedule. Q: The economy is in desperate need of all the measures you've described, but how fast can all this be done? A: I'm no-nonsense, you know. If you look at my track record, I was at Bulog for four and a half months only. [Note: He was involved in the agency at a high level for years.] I was asked to come in because the price of gaba, unhusked rice, went up so sharply that the farmers started complaining. So I helped stabilize that within the first two months, real action. Second, my assignment was to reform this organization, clean up this organization. What I did was within two months' time. I said, "We are going to change this government agency into a semi-state-run enterprise within one year's time, so that it is more transparent and accountable." [Then,] I changed the accounting system into a more generally acceptable accounting system. Third, I put all off-budget money into the budget, so it's accountable. Bulog, like Pertamina [the national, military-dominated oil company], also [had] off-budget money that [was] set aside. Fourth, I replaced about 80 top officials in this organization. Nationally, and at a regional level, I changed [the group] by 65% with new blood with better credibility. And I did that within two and a half months' time, without any revolt. Q: Do you have bodyguards, like the Attorney General? A: No. I believe in God [laughter]. Q: What are your worst fears? A: We're still greatly concerned about regional security.... My partner, Coordinating Minister for Politics & Security Bambang Yudhoyono, is a respected general and a very persuasive general. I do believe that he can establish discipline within the security apparatus. And I'm convinced that he will be able to provide better political stability and regional security, and that is a very positive platform for economic recovery. Q: What do you have to do to bring in investors? A: Investors look at a sense of security, political stability, and attractive business opportunities. [Those are things] that we are going to provide by a coherent policy approach. Q: Does any impact on the economy remain since the anti-Chinese race riots of May, 1998? A: Oh, no. We are over it. We are. Q: Have you talked to the Singapore Chinese Chamber of Commerce or delegations of investors from Hong Kong or Taiwan? A: In the past, I did, yes. They look at the electronic media and saw Ambon [the capital of Maluku, where militant Islamic fundamentalists have been slaughtering minority Christians]. And Indonesia is not just Ambon. Q: Indonesians I've met who have spoken to delegations of investors from Hong Kong, Singapore, and Taiwan, say they always ask if the government has arrested, prosecuted, tried, or convicted the perpetrators of the anti-Chinese riots and gang rapes of May, 1998. A: The New Order [regime of former-President Suharto] killed millions of people, O.K.? Most of them are non-Chinese. We despise the murder, the human-rights abuse. That's why we set up these human-rights institutions, and etc. But as a nation, we also have to look forward. Q: Is the corruption trial of former-President Suharto important for Indonesia's economic recovery? A: It's important to give a sense of justice to the public. Q: What if he's pardoned? A: If he's found guilty or not guilty, and even if the President gives a national pardon, it's important to confiscate some of Suharto's assets. If you have a court decision, you can confiscate some assets. Q: What value of assets do you hope to confiscate? A: You can ask central banks the world over. If you have a court decision, you can ask central banks worldwide to start tracking. But if you don't have a court decision, you can't do it. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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RELATED ITEMS Wahid's Cabinet Coup (int'l edition) ONLINE ORIGINAL: A Talk with Bambang Yudhoyono (int'l edition) ONLINE ORIGINAL: A Talk with Rizal Ramli (int'l edition) INTERACT E-Mail to Business Week Online | |||
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