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| Photo from: Jakarta Globe |
In his presentation nine years ago in HK, I remember that two of his slides showed a quote from Adam Smith,
[The rich] consume little more than the poor… They are led by an invisible hand … and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species.
I liked his presentation. He is a soft spoken yet highly articulate and intelligent guy. He got his PhD Econ from the Australia National University (ANU). During the EFN Asia conference in Kuala Lumpur in 2005, he was supposed to come too but he did not arrive. He was at that time, the Director of the Institute for Economic and Social Research Faculty, University of Indonesia.
Here are two news reports today from the Jakarta Globe.
Editorial: Free-Market Thinker to Lead Finance
By Jakarta Globe on 9:23 am May 21, 2013.http://www.thejakartaglobe.com/opinion/editorial-free-market-thinker-to-lead-finance/
The appointment of M. Chatib Basri as the fourth finance
minister under President Susilo Bambang Yudhoyono is a welcome move. The new
minister has the requisite experience, but more importantly he understands the
needs of the business community.
As he settles unto his new post after a successful stint
at the Investment Coordinating Board (BKPM), Chatib will have to tackle several
key issues immediately. These include keeping the budget deficit from
exploding, dealing with the fuel subsidy issue and boosting tax collection.
These are not easy challenges, but Chatib has the
experience, skills set and economic knowledge to make the right decisions.
The most pressing challenge will be to deal with
ever-rising fuel subsidies. It is clear that the state cannot afford to fund
fuel subsidies without causing serious damage to the state budget and
macroeconomic stability. But managing the political implications of raising
fuel prices will require skill and a significant amount of socialization.
On this score, his apolitical stance will stand him in
good stead. Political parties cannot accuse him of politicking or favoring any
side. But he will have to work hard to get legislation on his side.
Chatib is also probably the best person to improve the
investment climate given his time at BKPM, where he cut red tape significantly.
He will have to continue these efforts at the Finance Ministry. If he is able
to streamline bureaucracy, he will have made a major contribution to improving
both the investment as well as the business climate in the country.
A soft-spoken man, Chatib is nonetheless a forceful
economic thinker. He is a free-market advocate who supports free enterprise,
which is critical in ensuring that Indonesia remains an open economy. His
appointment is good for the country and the economy.
Urgent Budget Matters Await New Taskmaster of Finance Ministry
By Gabriel Kereh & Ezra Sihite on 8:46 am May 21, 2013.http://www.thejakartaglobe.com/news/urgent-budget-matters-await-new-taskmaster-of-finance-ministry-2/
Tackling the national budget will be a recurring
experience for M. Chatib Basri, who becomes the fourth finance minister in the
administration of President Susilo Bambang Yudhoyono.
Among the priorities to tackle are fuel subsidies, the
budget deficit and tax collection, according to business leaders.
Yudhoyono has said that the subsidized fuel price will
increase by a third to Rp 6,000 (61 cents) a liter in order to reduce the
burden on the state budget.
He warned last month that the budget deficit could widen
to 3.8 percent of gross domestic product if no action was taken to curb the use
of subsidized fuel. The budget deficit is currently at 2.5 percent of GDP,
below the legal limit of 3 percent. Fuel subsidies are estimated to cost about
$20 billion this year alone.
Reuters reported on Monday that the 2013 budget revision
proposals assume the price of low-octane gasoline will rise by Rp 2,000 to Rp
6,500 a liter. Diesel would be Rp 1,000 higher at Rp 5,500 a liter.
As a person not affiliated with any political party,
Chatib will have to polish his political skills in working with other
ministries, the House of Representatives and opposition parties, said Didik J.
Rachbini, a senior economist and member of the National Economic Committee
(KEN), which advises the president.
“He [Chatib] is a professional. He knows all the
technical things that he needs to do,” Didik said. “Nonetheless, he also needs
to know about the art of politics. Political actualization needs to be shown.
He needs to have good networking with the House, opposition and political
parties in order to do this.
“He has to be able to do this. But I think he can. I
mean, the orientation of the House, the parties and other ministries are to
help the people of Indonesia to prosper. This could be seen as a meeting point
of interests despite all the differences that might exist,” Didik said. “My
response toward him as the new minister of finance is positive. He seems like a
capable man. Let’s give him room to do more.”
Yudhoyono said on Monday in announcing Chatib’s
appointment at the State Palace in Jakarta that Chatib should maintain the
country’s prudent fiscal policy amid volatility in the global economy.
“[The state budget] has to be kept healthy, that needs a
prudent fiscal policy,” the president said.
The second task is to improve the country’s investment
climate. Yudhoyono said that the new finance minister should be able to provide
incentives — such as tax breaks — to attract more investment.
Third, Yudhoyono asked Chatib, who will be inaugurated as
finance chief today, to support sectors that provide many jobs….
Suryo Bambang Sulisto, chairman of the Indonesian Chamber
of Commerce (Kadin), said that Chatib’s experience as head of the BKPM helped
him in understanding many aspects of the economy.
“I think choosing him is the right decision. He is one of
the most prominent economists of this time that understands the macroeconomy. A
minister of finance that understands the real sector would be good for the
business world,” he said.
“We hope the new finance minister could cooperate better
with the business sector in order to create a more conducive business climate
and to boost the performance of our real sector, especially in trades and
industries.
“Nonetheless we also expect him, as the country’s
financial gatekeeper, to be able to take strict and conservative acts whenever
needed so that the country’s financial ground could be safe.”
----------See also:
EFN Asia 10: Conference November 2012 in Hong Kong, June 19, 2012
EFN Asia 15: Distortions of Welfare Populism, January 17, 2013
EFN Asia 16: Participation in Jeju Forum for Peace 2013, March 19, 2013
EFN Asia 17: Zubair Malik as President of FPCCI, April 05, 2013
EFN Asia 18: Jeju Forum's Economic Panels, April 19, 2013
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