22 May 2009

Is Boediono a Neoliberal?


Susilo Bambang Yudhoyono or SBY as he is affectionately known by the masses has selected the now resigned Central Bank Governor and former Coordinating Minister of Economic Affairs, Boediono, as his running mate for the upcoming presidential elections (photo courtesy of Kompas). There has been mixed reaction to the selection not only from members of the coalition of parties that declared their support for SBY in the period after the general election, but there has been considerable criticism levelled at Boediono from all quarters about his supposed neoliberal attitudes.

The word, neoliberal, is being bandied about like it is some kind of poison chalice that has the potential to sink the SBY march towards a second term. This is fanciful thinking at best considering most polls have SBY running so far ahead of the other candidates that a run-off election is looking unnecessary. In fact some polls have SBY securing more than 70% of the vote if the presidential election was held today.

Even if some of the other parties gain a little bit of traction on this neoliberal point which is a catch word for being pro-capitalism, pro-markets, and anti-little people. It has to be noted that on each of the other two tickets you have men who have made fortunes exploiting the little people and being actively involved in the free markets and the capitalist ideal. Jusuf Kalla is going to get no traction from this.

Megawati and Prabowo are also not going to gain much from running a neoliberal argument. Prabowo is, according to the recently submitted wealth reports, the wealthiest of them all. This is funny in that perverse kind of a way considering that Prabowo's whole campaign has been based on his ability to empathize with the little people, the farmers, the small scale traders, the poor. How does a man with IDR 1.7 trillion in assets and cash empathize with the daily grind that is the life of a sharecropper in the rural areas of Indonesia? When was the last time Prabowo lived from harvest to harvest in a period of sustained drought?

So, what is neoliberalism anyway. You can find an interesting article on it here. Nevertheless, most tend to agree that neoliberalism contains the following key elements: free markets, slashing public expenditure, deregulation, privatization, and replacing the idea of community with individual responsibility.

Now, the case for Boediono being a neoliberal is that he is beholden to the free market and as such a sell-out to foreign interests and must even be considered as a traitor to his own people. Somewhat extreme, but this is Indonesian politics in action, some might argue democracy in action. Boediono has pointed out in response to this criticism that he was chosen by SBY an Indonesian, and if he was beholden to foreign interests then SBY would never have selected him to be VP. This is hardly a convincing or strong argument against being neoliberal.

The better response he has made to these charges are that there is, in any economy, a need to participate in the free market. However, this is to be moderated with effective state intervention to ensure that the interests of the state and in essence the interest of the little people are protected. To this end Boediono oversaw a number of programs that were definitely pro-poor such as the Direct Cash Assistance (Bantuan Langsung Tunai / BLT) program.

However, his critics quickly point out that it has been under Boediono's watch that some 40 State-Owned Enterprises (Badan Usaha Milik Negara / BUMN) have been vetted for privatization. I am not for privatization for privatization's sake, but sometimes a poorly performing state-owned enterprise can benefit from the escape from government bureaucracy. The government can set strict rules to ensure that the assets are not completely lost or that the privatization must take into account particular interests.

In this sense, Boediono is more an economic realist. He realizes that there is some benefit to be enjoyed from the better economic management of government interests and exposure to the free market might provide greater benefits than the oft claimed negatives.

In any event, the claims have seen a heated little battle between Boediono and Kalla emerge to the fore. Kalla claiming that Boediono's neoliberal ways will see the collapse of the Indonesian economy and all Indonesians being destined to become migrant workers in their own country (awesome visualization if you can get your head around it as most Indonesians are familiar with the trauma that most Indonesian migrant workers suffer at the hands of unscrupulous foreign employers). For Boediono, his dig was that a vote for Kalla is a vote for a family firm that is destined to employ all means of state to developing and supporting the family business.

I am always keen for a little bit of to and fro during an election cycle.

The outcome here is that the SBY ticket is likely to offer up a mixed bag on the economy. Specifically, there are likely to be elements of the free market (with the emphasis being on fair trade rather than free trade) and perhaps explicit protections from an over-deregulation or privatization of natural resources, particularly those in the mining, oil and gas, and forestry sectors.

Is Boediono a neoliberal?

Not 100% neoliberal.

14 comments:

Katadia said...

Hmm, he's as much as neolib as Prabowo is a left-winger! Ho....ho..

lawekka said...

good piece. Do you recall Mega's criticism of the BLT? ..in short...?

Rob Baiton said...

KD...

Prabowo isn't a left-winger, really?

He has allegedly had a fascination for left-wingers though for quite sometime including, some say, the use of enhanced interrogation techniques to learn all about what the left is about and the struggle of the little people.

My guess is that Prabowo would be pretty well-informed about the left, don't you think?

Lawekka...

Not really.

lawekk said...

for what it is worth.....here is a snippet

Jember - Bantuan Langsung Tunai (BLT) merendahkan harga diri bangsa. Pernyataan itu disampaikan oleh Ketua Umum PDI Perjuangan Megawati Soekarnoputri dalam pidato kampanye terbuka di lapangan Mangli Kecamatan Kaliwates, Jember, Jumat (20/3/09). Kritikan itu disampaikan di hadapan ribuan simpatisan dan kader PDIP.

Menurut Mega, BLT merupakan pendidikan moral yang buruk bagi masyarakat dan masa depan bangsa Indonesia. "Apa arti BLT hanya untuk uang senilai Rp 200.000 saja berdempet-dempetan tanpa harga diri seperti pengemis," katanya.

Katadia said...

:)

So you're not questioning my suggestion that budiono isn't a neolib, but you somewhat could believe that Prabowo is a leftie? LOL

I tend to agree with you (that he's well-informed about the left). Maybe he got 'enlightened' thru interrogating activists. I have episodes of their potential conversations in my head.

My dad truly thinks Prabowo could deliver his promises. I remain a little cynical, but then again I'm not there and I don't know much about the guy. So I'll vote for the ones whose ideas are closer to 'home'.

Lawekka: she said that?

lawekko said...

Yes "she said" and she went on to suggest other things that could be done with the money..... like fixing the rivers

Rob Baiton said...

Lawekka...

Thanks.

Come to think of it I recall that little bit. I guess I just needed someone to refresh my memory (getting old you see).

KD...

Sarcasm.

No, I do not believe that Boediono is a neoliberal, Nevertheless, there are definitely "neolib" elements there.

Prabowo will never be a leftie. Nevertheless, a platform that aligns you with the "wong cilik" or the little people is a smart political move.

I would be a little concerned with the idea that Prabowo can deliver on his promises considering his track record of the past, particularly the methods allegedly employed to ensure he delivers on his promises.

Lawekka...

I guess rivers are important in the big scheme of things but to any self-respecting wong cilik so is feeding your family.

Harry Nizam H. said...

The allegation is totally absurd!
In 2001-2004:
Mega was President thus Boediono's boss, when he was a Minister.
In 2004-present:
Kalla, VP, also Boediono's boss, when he was Minister, then former BI Governor.
As in any other countries, in Indonesia position of President & VP is higher than any Minister. So, if Boediono is a Neo-Lib, Mega and Kalla should also be same.

Rob Baiton said...

Harry...

I don't know that it is absurd, but it does beg the question as to the judgment of Mega and Kalla, doesn't it?

After all, if they are so anti-neoliberal why is it that they are only making that stance explicitly clear now?

Politics, I am lovin' it! (much more than Mickey D's)

anong said...

what did you think of Anand Krishna on Boediono in Jakarta post?

Rob Baiton said...

Anong...

The piece on faith and sex?

So, you feel that Boediono is not so much a neoliberal but rather just a fella with a lot of pent up sexual energy that he is releasing through public service?

:D

anong said...

nice way of putting it. I wish Mr K was so suck-sinct..

I was interested in all the "healthy" comments to his article

anong said...

sorry. I meant to write "not so suck-sinct". Frankly I could understand the comments better than the article. Nevertheless I believe there is much in his observations, or behind them..

Rob Baiton said...

Anong...

The beauty of a relatively free press; you can write pretty much what you want and then have people comment pretty much as they want.

I think the comments are a bit of a mixed bag. Nevertheless, that is to be expected as the article surely affects people in different ways.

To each their own. Although, the varied views on the PKS are interesting.