|Laman Webantu KM2A1: 4503 File Size: 9.7 Kb *|
Bloomberg: Wahid Fights Fire With Fire
By David DeRosa
19/5/2001 3:44 pm Sat
[Membiarkan seorang diktator seperti Suharto terlalu lama
menyebabkan Indonesia dilanda huru-hara politik dan ekonomi
yang amat perit tanpa ada sesiapa dapat membaikinya dengan
segera. Suharto telah mewariskan satu kemusnahan yang menggila
buat Indonesia. Beliau sengaja meninggalkan satu vakum kekosongan
kuasa tanpa ada satu alternatif mudah untuk membaikinya (melainkan
dengan kejahatan juga??). Sudah tentu rakyatlah yang akan menjadi
mangsa malapetaka. Begitu jualah dengan diktator Malaysia yang
Rencana DeRosa yang kedua mengisahkan sikap pelabur terhadap rancangan
Greenspan itulah punca kelam-kabut jadinya. Di sini ketelitian fakta
memainkan peranan - bukannya reaksi spontan yang kerap membuat ramai
tertipu kearah mana ekonomi sedang berjuaian.
Indonesia's President Wahid Fights Fire With Fire:
By David DeRosa
Most likely, no one in Indonesia is surprised at their fire-
breathing president's antics. He not only dared them to impeach
him, he added that if he is impeached, he will immediately launch
a ``direct personal campaign'' -- presumably to be re-elected
What's more, Wahid predicts that his impeachment would
trigger a declaration of independence by at least five, maybe six
provinces. ``Apres moi, le deluge,'' as Louis XIV was wont to
remark at Versailles.
Wahid is under two motions of censure from parliament. He
stands accused of misusing $6.2 million in state money that was
supposed to buy food for the poor. He has until the end of May to
answer charges but has publicly stated that he has no intention of
gracing these accusations with an answer.
Pity The Country
So where does this leave Indonesia? In the lurch, where it
has been since General Suharto was booted out of the presidency in
May 1998 after more than three decades of absolute power.
Wahid, a 60-year-old Muslim cleric, has been in power since
October 1999. By all counts he was the man least likely to have
been elevated to the presidency and the least likely to have
survived so long. His stock and trade is that of diversionary
tactics, ducking and dodging his enemies. In fact, one of his
favorite tricks is to reshuffle his cabinet, which he has done ten
times, when the opposition looks like it is closing in on him.
I doubt there is any serious person who believes that Wahid
is competent to rule Indonesia. The man has got to go. Yet for
whatever reason, maybe because of political or economic chaos, a
replacement leader has yet to appear on the scene. There are
candidates, of course, but the problem is how to get them to
This is a prime example of how a country such as Indonesia
can suffer long after a tyrant is removed. Independence from
dictatorship is freedom but is also freedom to flounder.
And the problem for newly democratic nations in some cases is
that the people who come to power after a revolution are unable or
unfit to govern. It is not too surprising because the old regime
often held onto power by creating a vacuum in which there are no
workable alternatives to their tenure.
The Lady In Waiting
Which brings me to the big question: When does Megawati
Soekarnoputri, the vice president, and in some people's mind the
heir apparent, make her power play? Megawati is the daughter of
the dictator Sukarno, who ruled Indonesia from 1956 to 1966. Does
this lion cub hunt?
So far, Madame Vice President has shown little outward
interest in governing.
Megawati is either the shrewdest person to come down the pike
or a complete lightweight. I say shrewd because her indifference
could be the sign of someone who knows about timing. To a very
clever politician there would be no point in taking over the
country until it has nearly hit bottom. The art is to catch the
point of inflection, when things start to improve.
So that may be the Megawati index for us to watch. We will
know that things are looking better to this ultimate insider when
she starts to assert control. Until then, the lady is at leisure.
Or maybe she just doesn't care.
Time to Debunk the Fed's Image of Omnipotence:
By David DeRosa
New Canaan, Connecticut, May 18 (Bloomberg) -- Do you
sincerely believe the U.S. Federal Reserve can jump start the
growth-stalled American economy by cutting short-term interest
rates? Is the Fed really that good? Apparently stock market
investors think so. How else can Wednesday's 342-point surge in
the Dow Jones Industrial Average -- one day after the Fed cut the
interest rate -- be explained?
This leads me to think that a lot more than stock prices,
jobs and profits rides on whether Federal Reserve Chairman Alan
Greenspan's latest policy gambit is a success. What is on the line
is the image of the U.S. central bank as supreme controller of the
economy. And a good deal of mythology is contained in that image,
one should note.
Consider what has happened. Around last October the mighty
U.S. economic growth story derailed. After nearly a decade of
superlative growth, U.S. companies began to report sales slipping
and profits evaporating. Let us not forget that the Federal
Reserve raised interest rates less than two years ago -- though
practically nobody seems to remember that questionable policy move
On Tuesday, the Fed cut its target for federal funds by one
half of 1 percent to 4 percent Tuesday. This was the fifth time
this year the Fed has cut the short-term rate for overnight
interbank lending -- and remember that we are only in the month of
May. In total, the target for federal funds has dropped by 2.5
percent since the Fed began cutting interest rates in January.
To wit, the Fed's explanation of Tuesdays' cut left open the
possibility that it will make further cuts in interest rates with
its declaration that the risks of further economic weakness will
remain for the foreseeable future. So not only did the interest
rate come down by one half of 1 percent on Tuesday, but investors
came to believe that more cuts are in the pipeline.
What I find amazing is the complacency with which people
accept the situation in which the Fed finds itself. Face it -- the
Fed has all the appearances of a central bank that is running for
its life. It is dropping interest rates like a sinking ship
But the general belief persists that the Fed, and, to get
personal, Alan Greenspan, are omnipotent and all-powerful in the
stewardship of the economy.
Never mind that a whole host of central bankers around the
world have throughout history failed miserably in their attempts
to fine-tune their economies. People still want to believe that
Greenspan can slow the economy down when it is too hot and can
invigorate it when it is dragging.
Debunking the Fed
The cult of Greenspan originated during the long period of
prosperity and growth in the 1990s. The conventional wisdom is
that Greenspan (more than President Bill Clinton) should be
credited with America's economic miracle.
Not that Greenspan went about trying to create his public
image. The economy boomed, inflation remained under control, the
stock market flourished (for most of his watch), so he got to wear
the laurels. And I am not saying that Greenspan isn't a rather
good central banker. But to be realistic, he was in the right
place at the right time.
If Greenspan pulls this off -- if he can resuscitate the
economy, get it to begin to grow again -- it will perpetuate the
myth of the superman central banker. And as much as I would like
to see the economy pick up, I worry that it would reinforce the
erroneous view of the Fed.
On the other hand, there is a silver lining to the
possibility that the economy will not respond to the Fed's tonic.
I can't help thinking that it would do the country a lot of good
for people to be disabused of their fairy tale belief in the power
and competence of the central bank. If people stopped expecting
the impossible, it might be a great relief for Alan Greenspan.