Boediono: Appearance is more important than substanceIf you haven't been following SBY's attempts to please everybody in his first
Cabinet reshuffle, then what follows may not be of immediate interest, but bear with me.
Firstly, Boediono's appointment as Co-ordinating Minister of the Economy seems to have pleased everybody, from political parties to businessfolk and investors. I can't claim to have understood why, but then money and Jakartass are not synonymous.
However, I did make the effort to read Part 1 of
The Indonesian Economy: Lessons from the past, in today's Jakarta Post, a paper Boediono presented first at a seminar in the Australian National University and then last Saturday at The Indonesian Academy of Sciences. It caught my eye, and mind, for its obvious truths, so I offer you the following (edited for length) excerpt from a condensed version as a taster.
Beware of possible disharmony between politics and economics.
We have seen that much of Indonesia's modern history is about powerful interactions between politics and economics. One historical truth is that the dynamics of politics and those of economics are not naturally in harmony with each other and, when they are not, setbacks in both politics and the economy eventually result.
What we need is not only a keen awareness of these facts but a conscious effort to make these two forces mutually reinforcing at every stage of the transition, rather than mutually destructive.
On the one hand, we know that to build a viable democracy with all its essential elements -- basic security, rule of law, responsible political parties, a well-informed citizenry, a professional bureaucracy and so on -- will take a long time. On the other hand, people expect improvements in their living standards now.
Our experience in the 1950s, as well as in recent years, suggests that the practice of democracy may constrain good economic policy in at least three ways.
First, the political process in a democracy tends to have an inherent bias toward the short term. Politicians put a premium on policies that deliver results now and postpone costs until later.
Only the few visionaries among them are willing to back policies that promise long-term benefits but inflict short-term costs, even when it can be established that the gain far outweighs the pain.
When politics becomes more a game of five-yearly seat grabbing contests, factors that are absolutely critical to sustaining development in the long run -- such as institutions, human resource quality, natural resources, environment and technology -- tend to take a backseat, notwithstanding lip service that suggests otherwise.
Appearance is more important than substance, and if substance is involved, "short-termism" tends to ensure that the focus is on how to divide the existing cake, rather than how to make it bigger.
Second, too much politics can result in distortion of economic policy through the undue influence of sectional and narrow interests. Pressure from political parties, business and other trade lobbies, loud noises in the streets or soft whispers in the president's or a minister's ear, and other devious forms of pressure can and do have distorting effects on economic policy.
There is one important note, though: Our own experience suggests that serious distortions are more likely to happen in a nondemocratic, nontransparent setting. Transparency prevents some distortions, but not all.
Third, democracy as we see it in practice seldom goes together with decisive, swift action when such action is required.
All of us here can give examples of short-termism, of appearance being above substance, "devious forms of pressure" and the unprofessional bureaucracy ~ obvious truths indeed.
What is, perhaps, unusual is that a leading politician should publicly acknowledge these societal ills. The rest of the article reads like a job applicant's covering letter ~ the need for
a closely knit team with
the full trust and backing of the president.
Well, now that Boediono has got the job I look forward to reading Part 2. Perhaps he'll present his vision in such practical terms that he'll manage to convince his new colleagues to work together for the good of the nation, rather than themselves.
And maybe the citizenry will believe pigs can fly.
Changes to Economics Team1. Coordinating Minister for the Economy: Boediono
2. Minister of Finance: Sri Mulyani Indrawati
3. Minister of Industry: Fahmi Idris
4. Minister of Manpower and Transmigration: Erman Suparno
5. State Minister for National Development Planning/National Development Planning Board chairman: Paskah Suzetta
* Former chief economics minister Aburizal Bakrie has been appointed the new Coordinating Minister for People's Welfare
* Former chief welfare minister Alwi Shihab will be appointed as special presidential envoy for Middle East cooperation
Read
Yosef Ardi for reactions from politicos to the reshuffle.
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