Thursday, 29 May 2014


Government's succession to take place in October this year for the period of 2014 - 2019 generated new uncertainty among businessplayers. In 2014 - the last year of the present Government, perhaps the certainty level was secured. The only thing was upon arriving at year end of 2014 until 201 9 next there would be growing uncertainty about Government's policy. And almost certainly the next administration [2014 – 2019] would be a coalition Government of political parties of the General Election 2014.

So not to mention five years ahead, even for the short term the Government had to face three hard challenges at the same time. Firstly to ensure sup­ply of basic necessities for the Ramadhan fasting month and Idul Fitri holy festivity 1435 H on 28-29 July 2014.

Secondly, the challenge to maintain political stability security, peace and order toward Presidential Election on July 9, 2014. In the event no candidate scored more than 50% votes, there would be second round election scheduled for September 9, 2014.

Thirdly, the challenge to strengthen funda­mental economy, maneuvering for unpredictable glob­al changes. Time wise, the characteristics of the first challenge was yearly cycle, the second challenge five yearly cycle and the third challenge permanent and substantial.

Hence the economic policy for the next 5 years was part of the second challenge. One thing was sure the three challenges needed to be managed well as energy was drained for electoral activities.

To overcome the 3 challenges would be a good start for undertaking great task of the future. As in the years before, efforts would be maximized to ensure supply of essential need, money liquidity and mobility of Man toward Ramadhan and ldul Fitri.

Monitoring of national supply and store-checking must be enhanced in traditional markets to check prices of essential need like rice, sugar, frying oil, flour, chilli, garlics, chicken and eggs to anticipate inexplainable price up jump. On the road, The Ministry of Public Works would check, repair and build roads to smoothen traffic of goods and hometown rush for Lebaran.

Meanwhile the Ministry of Transportation co­ordinate with transport operators on land, sea and air to control ticket prices. Fortunately in Java 333 kilo­meters of the Jakarta-Surabaya double railway track was already operational this year. This would reduce traffic density on the road by 30% as they were transferred to railway. In terms of frequency, the dou­ble track railway would increase train departures from 84 to 200 per day.

Operations of newly completed airports like Kuaianamu, Ngurah Rai, Sepinggan, and Halim Per­danakusuma would smoothen passengers flow for hometown rush [mudik] for Lebaran. The commit­ment to enhance passengers and goods mobility in the future would be realized through building of dou­ble track railway on Southern Java to be operational by 2017.

Meanwhile development and expansion of six airports had been innaugurated like the Muara Bun-go airport Jambi, Pekan Serai Lampung Barat airport Lampung, Pagar Alam airport South Sumatra and Raja Haji Fisabillah Tanjung Pinang airport, and the new Sultan Syarif Kasim II international airport Pakanbaru. Meanwhile the Trans Sumatra toll road project, the Suinda Straits bridge and trans Sulawesi railway were also be prepared.

With the many infra structure development, many circles were optimistic that in thy next 5 years inter insular conectivity would be enhanced. About security, law and order during the Presidential elec­tion to be held on July 9 2014, all parties were ex­pected to contribute to National stabilization effort. Lose or win was natural and no one should take to violence.

Based on Electory Law no 42 year 2008 on President -Vice President election, the candidate pair could be proposed by party of coalition of parties hav­ing seats in House at least 20% of total number of valid votes at least 25%. Apart from the inter- party coalition negotiation process, it was of utmost impor­tance to publicise the national economic development platform 2014 - 2019 to the public by the candi­dates.

There were at least 2 important things why the platformn was important.

Firstly, as binding of political commitment for the next 5 years by the proposing parties. If the candicates win in the election, coalition in Parliament would be needed to ensure effective Government, considering that all the workplan would have their ef­fect on APBN budgeting related to public interest.

Secondly, economic policy based on vision, mission, strategy and objective of national develop­ment would determine the course of National Mid Term Development IRPJM1 2015 2019. The eco­nomic platform must be based on National RPJP plan regulated in Law no 17 12007 on National Long Term Development Plan 2015 - 2025.

In regard to the transition period which guar­anteed continuity of national development, in Article 5 Law no 17 2007 it was stated: "The President in power, in his last year of administration is obliged to scheme up Government's plan [RKPI for the first year of the next President's administration" However, the next elected President still had the authority to im­prove the RJP Plan and APBN budget 2015 in accor­dance with Law no 17 year 2003 on state's finance.

This Presidential economic policy would soon be the guideline for setting up of RPJMN 2015 -2019. The RPJMN contained national development strat­egy, general policy, ministrial/institutional program and trans institutional programs, regional and trans-regional and macro economic framework which en­compassed overal economic condition including fiscal directions in the workplan containing regulation plan and indicative financing.

Next, RPJMN would be specified in Annual RKP containing priority, program, budgeting and regu­lation platform So important was the policy platform of economic development to national economy 2015 - 2019 so it was necessary to give enough room for improvement.

Beside the figure factor and personality of each [President-Vice President) pair, the Masterplan Agenda for Indonesia's economy for the next 5 years would be evaluated by all society elements. In view of the political atmosphere over the past year, many people were optimistic that the Presidential election would run well.

By the time Indonesia was facing two domes­tic challenges at the same time, the world's economy was still full of uncertainty. Latest release of the Gov­ernment of China mentioned that economic growth of quarter 1/2014 was only 7.4%. Weakening trend in economy was also happening to other countries like Russia, India, Brazil, and Mexico while a numbert of countries in Europe and the USA were showing re­verse process.

From the financial viewpoint, the Fed's pol­icy was related to some issues like Tappering Off; and increase of the Fed's bank interest must be monitored so the risk of capital outflow could be well anticipated. Being part of the global economic system, Indonesia was challenged to strengthen fun­damental economy.

National economic resilience could only be stepped up by increasing forex reserves and manage overseas debt, tame inflation, narrow down deficit, manage trade balance, increase investments and create employment, strengthen people's purchasing power, build infra structure and expand industrializa­tion and downstream industry.

So far Indonesia was rated as having success­fully escaped from global crisis like oil price upjump in 2005 and 2008, subprime mortgage crisis, Europe's debt crisis, and Tappering Off Quantitative Easing III in the USA through Semester II 2013. To keep na­tional economy grew positively, evenly, and resis­tently, cautiousness and responsive action became indispensable.

In a stormy political year, national decision makers especially in economy must keep their effort focused and foster inter-ministrial and other bodies Coordination. Support from provincial Governments was most important and needed whereby to enhance effectiveness and harmony of policy. Transition of leadership must be well maintained; more important was to accomplish the agenda of development in In­donesia.

As footnote, the next Government would have to clash head on with hard agenda :

Firstly, the Fed's plan to end monetary stimu­lus followed by increase of bank interest in the USA which had the risk of pushing capital outflow from the emerging countries.

Secondly, readiness to join the Asean Econ­omy Community [AEC] effective as per January 1, 2016.

Thirdly, economic risk due to crisis and politi­cal tension in Ukraina, South China Sea, Korea, and regions potential of increasing world's oil price.

Fourthly, extreme climate which had the po­tential to cause harvest failure all over the world. This year the El Nino effect was predictably moderate, but still readiness was needed to shield off disaster as it was related to inflation [to be controlled at 4.5% + 1%].

Fifthly, other matters which had the potential to boost inflation, reduce national export, downsize investment and international trading, and destabi­lize national monetary market. Besides the economic policy platform of each Presidential candidate needed to refer to a great vision to build a glorious national economy.

Some of the essential things therein were : healthy fiscal management, employment facilitation, increasing state's revenues from tax and non-tax re­sources, to minimize poverty, to build infra structure for strengthening national industry, application of science and technology, food and energy resilience, and promoting health services. By knowing the strat­egy platform of each candidate, businessplayers could scheme up their own strategy at least for 2014- 2019. (SS)

Business New - May 7, 2014

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