An abdication of responsibility Suryo B Sulisto  ;   The chairman of the Indonesian Chamber of Commerce and Industry (Kadin)

JAKARTA POST, 03 September 2014

                                                                                                                       

                                                      

It was with utter disbelief and incredulity that I read the statements of Bank Indonesia (BI) Governor Agus Martowardojo, as quoted by The Jakarta Post on Aug. 30. That the central bank governor warned and even threatened the next government with dire consequences if it did not raise the price of subsidized fuel is highly unethical. As the chairman of the Indonesian Chamber of Commerce and Industry (Kadin), I strongly criticize this statement and urge action be taken on the issue now, not later. I am totally appalled by the comments made by the central bank governor. The governor further added that if the new government prolonged uncertainty over subsidy reforms, then the monetary authority would be forced to act, taking more painful measures to reduce oil imports. This could cause the economy to suffer a “hard landing”. This statement belies belief. How can the governor accuse the next government of prolonging economic uncertainty when it is not even in power yet? Surely it is the current government that should be blamed for prolonging economic uncertainty due to its unwillingness to raise subsidized fuel prices. I quote here a portion of the governor’s statement: “If no optimal measures are taken on the fiscal side — and at stake here is the confidence of global investors — then we may be forced to carry out painful measures to maintain financial system stability.” I find his statements very difficult to accept or even comprehend. His warnings should not be directed at the next government but at the current government. Indeed the current economic team has created this fiscal ticking time bomb and it cannot wash its hands off the problem and pass the bug to the next government. To do so would be highly irresponsible. There is no doubt that the fuel subsidy mess is an economic time bomb for the next government. But it is has been created by the current government by its refusal to deal with it when analysts and indeed even Kadin have been urging the current government since four years ago to bite the bullet. The governor of BI, by being part of the current administration and a former finance minister, is equally responsible for the mess the country finds itself in. The fuel subsidy, which has reached almost US$35 billion a year, is the greatest and most serious economic burden facing the nation and it is growing by each passing day. To leave this mess to the next government to resolve shows the current government’s irresponsibility and recklessness. It is also highly unethical. The Indonesian people are not stupid. They know and fully realize that the present government is leaving the time bomb ticking. Is the current government deliberately leaving the time bomb for the next government? Hopefully that is not the case for that would be an act of economic terrorism. This is not how a sitting government should act, especially since the president-elect has reached out in an effort to work together. What is truly appalling is that there is no sense of guilt among current economic ministers. If they are unwilling or incapable of dealing with this mess, which they have helped create, they should apologize to the Indonesian people. That would be the decent thing to do. In my view, the present government has only two options left before it leaves office. It can do the right thing and be a hero or it can abdicate its responsibility and forever be seen as a villain. If it wants to be a hero, then it should get rid of the fuel subsidy now and save the nation from further damage. The current government has nothing to lose as it cannot seek reelection. Acting in this manner will take courage, wisdom and leadership. In one stroke, it can remove the greatest economic challenge facing the country and put it on a sound footing. If it does the right thing no matter how difficult, its legacy will be secured. On the other hand, if the government chooses to sit on its hands while the country’s economy spirals out of control, its record will also be enshrined in the history books as being a villain. If it cannot muster the courage and willingness to take this difficult decision, it should say sorry to the people of Indonesia instead of issuing threats and warnings to the next government. ●