Herding cats in economic team

Coordinating Economic Minister Hatta Rajasa blew a fuse when he discovered Finance Minister Agus Martowardojo refused to approve the ambitious Sunda Strait bridge project in a meeting on Jan. 31.

Agus blatantly rejected a demand by Hatta, who is supposedly his boss, to sign his approval to the presidential decree already issued for the project to get underway.

“Why on earth are you backing off from this project, which has clearly approved by the President?” asked Hatta, as recalled by a businessman attending the meeting.

It was not until Hatta lowered his voice that Agus then decided to sign the document, but with a disposition saying that he would not be held accountable for any future legal problems related with the project, according to the businessman.

The incident is among countless disagreements between Hattta and Agus that may not be reconciled given their different backgrounds — Hatta is a politician who obviously seeks to please his voters, while Agus is a highly regarded former banker who prioritizes prudent measures.

Chairman of the House of Representatives’ Commission XI for economy, finance and banking Achsanul Qosasih said the rift in the economic team could have been prevented if Hatta had managed to play his role well.

“There is definitely a lack of coordination, or even no coordination. This issue must be addressed immediately,” Achsanul of President Susilo Bambang Yudhoyono’s Democratic Party said recently.

“For instance, the easiest example is the data mismatches between the Agriculture Ministry, the Trade Ministry and the Finance Ministry,” he said.

Agus denied any rift with Hatta, but acknowledged that coordination among ministers needed to be improved.

“The project [Sunda Strait bridge] is going well, but the fact is that we need better coordination,” he said.

Hatta, who is also chairman of the National Mandate Party (PAN), has not replied to The Jakarta Post’s interview request.

Commission XI member Andi Rahmat of the Prosperous Justice Party (PKS) said the president should be the one who reminded the ministers to quickly settle their differences, or to talk over policies that have become contentious issues among ministers.

“The differences must not go on unsettled. It’s the president who has the final call.”

A rift between Hatta and Agus also spanned from issues related to fuel subsidy cuts to the government’s decision to purchase shares in gold miner PT Newmont Nusa Tenggara.

But the rift is not isolated to Hatta and Agus, as there are signs other ministers are also at loggerheads with each other.

The public rift has emerged between Agriculture Minister Suswono, who is a senior PKS politician, and Trade Minister Gita Wirjawan, a former professional investment banker and businessman.

Recently, Suswono blamed a number of his ministry’s mishaps on Gita, including the failure to properly distribute subsidized fertilizer and to prevent rising imports of agricultural and horticultural commodities.

“Gita and Suswono have completely different platforms and backgrounds. This have made it difficult for them to see eye-to-eye on several issues,” said House’s trade and industry commission member Hendrawan Supratikno of the Indonesian Democratic Party of Struggle (PDI-P).

Indonesian Chamber of Commerce and Industry (Kadin) deputy chairman Bambang Sujagad said the rift among ministers could potentially cause regulatory bottlenecks and overlaps.

“It potentially could disrupt the business climate in the long run,” he said.

“The lack of coordination also causes confusion among businesses, as they have to deal with conflicting policies and overlapping regulations.”

Coordination issues among ministers

1. Agus has repeatedly said the country needs to raise electricity prices by 10 percent to ease subsidy pressures on the state budget before April. However, Hatta and Energy and Mineral Resources Minister Jero Wacik, a Democratic Party politician, insisted on waiting for further study.
2. Both Hatta and Jero said that raising fuel prices is merely an option, while Agus repeatedly said such policy is inevitable in order to salvage the state budget.
3. Agus decided to purchase shares in Newmont on the government’s behalf, but without prior coordination with Hatta.