Editorial: Taking an Astute Fiscal Position

By Jakarta Globe on 11:00 pm Aug 24, 2014
Category Editorial, Opinion

As Joko Widodo receives a presidential security detail to protect him in the weeks leading to his Oct. 20 inauguration, he and his transition team will have to do some heavy thinking on who will fill important ministerial positions within his cabinet.

One key position is the finance minister, who is essential in forming the budget that allocates spending for Joko’s programs, which range from universal health care to poverty eradication.

President Susilo Bambang Yudhoyono had astute finance ministers — Sri Mulyani Indrawati, Agus Martowardojo and now M. Chatib Basri — who were capable of dispensing the budget and keeping debt within the legal limits. Joko needs this kind of financial leader, one who can control the nation’s debts and at the same time find ways to generate revenue.

Transparency is also necessary to ensure that the process runs smoothly.

At the same time, Joko needs to find ministers who can help keep the economy growing. Indonesia can’t afford to let its finances slip into the hands of mismanagement as it did in the waning years of the Suharto era.

Too loose of a monetary policy and easy borrowing — especially taking out dollar-denominated loans by spendthrift companies — can curtail the nation’s achievements following the 1997-98 crisis. Indonesia has learned from lessons past and must move forward with a solid fiscal plan.

Whether Joko’s coalition can add more parties soon — a move that would ensure his policies would pass through legislation — remains to be seen in the days and weeks ahead.

But one thing is certain: Joko must form a cabinet that takes action, rather than be reactive, to challenging and demanding situations.