Institute for National and Democratic Studies

SBY-JK: Cursed by People, Praised by OECD

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Jakarta, INDIES — Last week, General Secretary of The Organization for Economic Cooperation and Development (OECD), Angel Gurria have visited Indonesia. The visit is aim to launch the OECD’s first economic assessment of Indonesia. “Indonesia must do more on liberalization”, said Gurria,  in Jakarta, Sat (07/26).

In its economic assessment of the country (see this link), the OECD said raising Indonesia’s growth potential and sustaining it over the longer term is the nation’s foremost policy challenge, as the current level of growth is insufficient to reduce poverty and unemployment.

“Indonesia needs to improve the business environment and make better use of labour inputs to put the economy on a higher growth trajectory”, the Organisation of Economic Cooperation and Development (OECD) said.

The report called for further reduction in subsidies particularly that of fuel prices, which takes a lion’s share of the total subsidies. Subsidies are expected to make up about 20 percent of central government expenditure in 2008.

It advised the central bank to react preemptively by tightening the monetary policy stance, should the outlook for inflation and expectations deteriorate further. Headline inflation and expectations have risen and are now well above the ceiling of the target range of 4-6 percent for 2008, it noted.

It also said the private sector can play a prominent role in the growth process, so long as the business climate can be improved considerably. “Economic and regulatory uncertainty, deficiencies in law enforcement and infrastructure bottlenecks are among the main barriers to entrepreneurship,” the report said.

Greater flexibility in employment protection legislation would also make for a better use of labour inputs, the agency said. This would help labour-intensive manufacturing sectors such as textiles, clothing and footwear, which were impacted by a tightening of the labour legislation, it added.

President Susilo Bambang Yudhoyono agreed to increase cooperation with the Organization of Economic Development (OECD) during a meeting at the presidential office. Yudhoyono said after meeting with OECD Secretary General Jose Angel Gurria that the cooperation with the group would boost Indonesia’s efforts to increase investments in the country.

“I positively accept the OECD’s proposal to build a closer partnership through the enhanced engagement. This means there is a greater opportunity for us to work together,” Yudhoyono told reporters. “If we can actively take part in the committees they offer, I am sure the cooperation will benefit us,” he said.

To be noted, OECD is a forum for developed countries led by US imperialism that strongly committed to the market economy and liberalization. South Korea and Japan are the only member countries from Asia.

During its Council of Minister in May 2007, OECD assigned the secretary general to strengthen OECD co-operation with Brazil, China, India, Indonesia and South Africa through enhanced engagement programs, with a view to possible membership.

Indonesia is not currently a member of the 30-member OECD but is among five non-member countries offered enhanced engagement with a view to possible membership. The other four are Brazil, China, India and South Africa. Indonesia is on the right track, said OECD.

INDIES Position

Syamsul Ardiansyah, researcher from Institute for National and Democratic Studies (INDIES), saw that in general, there is no substantial recommendation that been drawn by OECD. Among six issues that been assessed by OECD, almost all is not much different with the Susilo Bambang Yudhoyono (SBY) line in the economic policy.

Instead of some technical matter, in general, OECD wants Indonesia to keep in the neoliberal tracks and do more liberalization in all sectors. Worse, OECD was praising the latest anti-people policy of SBY in cutting price subsidy in oil and food.

“We are clearly seen that the most essential recommendation of OECD is only intensifying the plundering the people natural resources, increasing oppression of working people, accelerating the capital accumulation and concentration, and leave nothing, dumping, the Indonesian people,” said Ardiansyah.

The OECD policy brief on economic assessment of Indonesia 2008 is implicitly exposing the position of Yudhoyono administration as the puppet regime of imperialism. “SBY had been praised by OECD, but for sure, cursed by the people,” said Ardiansyah.

INDIES is currently works closely with other organizations in the democratic alliance called the People’s Struggle Front (Front Perjuangan Rakyat, FPR) campaigning anti oil price hike policy of the Yudhoyono administration.

People Struggle Front composed mostly by mass organization; workers, peasants, urban poor, migrant workers, women, and student, whom become the elements of community that suffer the worst impact of the neoliberal policies of Yudhoyono administration. Protest campaign of Peoples’ Struggle Front can be access in

“INDIES with all organization in FPR will continue fight against all anti-peoples’ policy of SBY administration”, Ardiansyah.

Written by INDIES

July 31, 2008 at 1:57 am

Posted in Siaran Pers

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