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AGENCE FRANCE-PRESSE, Wednesday October 10, 2001

Honeymoon is over for Indonesia's Megawati, say observers

JAKARTA, Oct 10 (AFP) - Two months after installing her cabinet amid a wave of cautious optimism following the chaotic 21-month rule of Abdurrahman Wahid, the honeymoon for Indonesia's fourth president Megawati Sukarnoputri is over, observers and analysts say.

"Most countries give their new leaders 100 days or three months before unleashing the criticism, but in Mega's case it's only been two months and everyone's criticising her now. There are even calls for her resignation," said political analyst Rizal Mallarangeng.

"The honeymoon is over," he told AFP.

The daughter of Indonesia's founding president Sukarno came to power on July 23 when the national assembly unanimously impeached Wahid and installed her in his place.

Her slowness in selecting a cabinet to replace Wahid's tumultuous and ever-changing administration -- she took more than two weeks to choose her ministers -- was tolerated as a "slow but sure" style of decision-making.

Megawati was also late in delivering the 2002 budget, but it was greeted on September 7 as smart and realistic and a further sign of the "slow yet steady" approach.

Her government also won praise for reviving a key five-billion-dollar loan program with the International Monetary Fund (IMF) on August 27, after an eight-month suspension.

But the cabinet cannot keep dining out on its budget and the winning promises it made to the IMF, said speakers on the sidelines of a seminar Tuesday to assess the government's first two months.

"On paper it looks good," economist Tubagus Feridhanusitywan told AFP.

"But in reality, whether the cabinet can get things done in time, with the aftermath of the World Trade Center bombing -- I doubt it."

The September 11 terrorist attacks against the United States and the US-led response had accelerated the end of the honeymoon, observers said.

The tight budget projections were being squeezed by the global economic slowdown, with the rupiah falling and threatening inflation targets, Feridhanusitywan said.

Hardline Muslim threats against foreigners were harming investment prospects.

"'Slow but sure' is fine when things are calm, but it's no good in the current climate."

Hardline Muslim groups have railed against Megawati's failure to condemn the US attacks on Afghanistan and her limited support of the US-led fight to wipe out terrorism, even though she has stopped short of condoning military action.

"The situation has changed suddenly. The new question is whether her cabinet can be more dynamic and follow up on what it's pledged in the budget and letter of intent (with the IMF)," Feridhanusitywan said.

He accused the government of backtracking on tough steps outlined in the budget like the sell-off of state assets.

"They're already talking about just selling 30 percent of the government's 51 percent stake in BCA (Bank of Central Asia)," he said.

He also accused the central bank of failing to control base monetary growth, risking higher inflation and currency depreciation "as we're already seeing."

For the first time since Megawati came to power the rupiah dived below 10,000 to the dollar last week.

Feridhanusitywan named law enforcement as the cabinet's greatest weakness, citing the Supreme Court quashing of a corruption conviction against Tommy Suharto, the former president's fugitive son, and the absence of any corruption prosecutions since Megawati came to power.

"We haven't seen anyone go to jail yet," he told AFP.

The economist said he had dropped his initial 'B-plus' rating of Megawati's cabinet. "Now it's definitely less than B," he said.

Mallarangeng defended Megawati, saying she was restricted by her "limited political capital" in what she can achieve before the 2004 elections.

"With only 30 percent (of seats) in the parliament ... you cannot eradicate corruption, and you cannot reform the court system," he said.

Economic reform was more attainable, he said, and for that, he gave her government's two month-performance "7.5 out of 10."

"You've passed the test but you could perform better if you study harder," he said.

Center for Strategic and International Studies director Hadi Susastro said Indonesia's economic recovery would be set back an extra seven years by an expected slowdown in exports and capital inflow in response to domestic upheaval over the US-led strikes on Afghanistan.

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