The Jakarta Post
Business leaders have welcomed newly-appointed Trade Minister Gita Wirjawan and State-Owned enterprises ( SOEs ) Minister Dahlan Iskan, hoping that both can change current economic policies.
Gita, previously the Investment Coordinating Board ( BKPM ) chief, replaces Mari Elka Pangestu – who, according to sources, will replace Culture and Tourism Minister Jero Wacik, while Dahlan, formerly president director of state-owned power company PT PLN, replaces Mustafa Abubakar, who is recovering from a cardiac illness.
Indonesian Employers Association ( Apindo ) Sofjan Wanandi called the two new ministers the “right men in the right places”, saying that both Gita and Dahlan had the capability to perform their new duties.
“Gita has a great deal of experience on the international stage, especially due to his position as BKPM chief. Meanwhile, Dahlan is a businessman who really understands what the business world is like. He knows about efficiency and adding value,” said Sofjan.
Sofjan said that one of the biggest tasks for the new trade minister would be ensuring locally-made products dominated the domestic market, many analysts criticized Mari for her failure to achieve this.
“The domestic market accounts for 70 percent of our economy. The new minister should find ways to curb the inflow of imported products,” said Sofjan.
Since taking office in late 2004 critics have said that Mari, who is of Chinese-Indonesian descent, had failed to promote Indonesian exports sufficiently or stem the flow of cheap goods from China.
Support from the business community during her early years in office waned as a result of her inability to protect the local market. Mari has also been involved in a string of disputes with her colleagues at the Industry Ministry, the Agriculture Ministry and the Finance Ministry, creating confusion among businesspeople.
The rows revolved around the failure to anticipate the implementation of the ASEAN-China Free Trade Area ( ACFTA ), as well as the importation of various commodities, such as salt from India and MA-60 aircraft from China. Exports of natural rattan also caused a dispute.
The implementation of the ACFTA hurt many domestic industries as locally-manufactured products could not compete with cheaper products from China.
“Gita should forge better ties with related colleagues to deal with this issue,” said Sofjan, adding that Gita had to ensure that free trade agreements were only applicable in the national interest.
The Indonesian Chamber of Commerce and Industry ( Kadin ) deputy chairman Haryadi Sukamdani shared a similar view to Sofjan, saying the new trade minister had to prioritize the domestic market, especially in these times of global economic turmoil.
“The Trade Ministry should help increase the share of local products in the home market,” said Haryadi.
“It must use non-tariff barriers that are commonplace in many countries to curb imports,” he said.
A minister, who declined to be named, said Mari’s ouster was the result of pressure from business associations who had lost confidence in her policies, as well as from the Golkar Party whose ministers were often at odds with her.
Meanwhile, Sofjan and Haryadi also said that the new SOEs minister had to improve efficiency in government-led firms and support the real sector. Haryadi said that the SOEs ministry — which was responsible for several strategic sectors, such as banking and energy — had to make breakthroughs to support the real sector.
“Banking plays a strategic role. Dahlan needs to have the courage to cut the interest rates of banks under his ministry’s management in order raise the competitiveness of our industrial sectors,” he said, citing high interest rates as a key problem deterring businesses expansion.
Recent disputes involving Mari:
Mari faces criticism from Golkar Party politician Bambang Soesatyo about Chinese-made planes. Bambang made a racially provocative statement alleging that Mari favored her ancestors’ interests in her policies.
Mari denounced by Maritime Affairs and Fisheries Minister Fadel Muhammad, also a Golkar politician, for permitting the importation of salt, mainly from India, during harvest time.
Mari ups the ante in the already tense relation with Industry Minister MS Hidayat, a Golkar politician, on rattan exports. Hidayat demands a halt to rattan exports as local industry faces raw material shortages, while Mari insists on exporting rattan on a quota basis.