Antimonopoly law on the cards for next year<\/p>\n
JAKARTA (JP): A bill on fair business competition is expected
\nto be submitted to the legislature before the end of December and
\nbecome law early next year, in accordance with the schedule of
\nthe bailout agreement with the International Monetary Fund (IMF).<\/p>\n
Secretary-general of the Ministry of Trade and Industry Aidil
\nYuzar said yesterday introduction of the bill -- also known as
\nthe antimonopoly bill -- was part of the effort to create fair
\ncompetition in all business activities.<\/p>\n
\"The drafting team will meet a team from the DPR (House of
\nRepresentatives) before the end of this year,\" he told reporters
\nat a seminar.<\/p>\n
He explained the bill was designed to create an efficient
\nmarket economy, consumer protection and prevent economic
\nconcentration among certain business groups.<\/p>\n
\"The bill will also prohibit collusive agreements, like price
\nfixing between businesses.\" He added the provision would help
\nprepare the country's business sector for the implementation of
\nthe Asian Free Trade Area by 2003.<\/p>\n
He conceded the definition of monopoly was still a major issue
\nin designing the competition policy.<\/p>\n
\"Should 40 percent market domination be considered a monopoly
\nor should the limit be 75 percent,\" he said of the quandary.<\/p>\n
He added that another major issue was whether to allow a
\nmonopoly for certain economic sectors as long as it was intended
\nfor the welfare of the people.<\/p>\n
\"The Constitution allows a monopoly on production sectors that
\ncontrol the needs of many people, like water.\" He said the state-
\nowned fertilizer makers, water supply company and train operator
\nwould retain their monopoly status.<\/p>\n
The government received technical assistance from the USAID,
\nAsian Development Bank and the World Bank in drafting the
\ncompetition bill, he said.<\/p>\n
An independent Fair Trade Commission would be established to
\nensure the law is implemented, he added.<\/p>\n
\"The members of the commission will be selected by the DPR and
\nreport directly to the President.\"<\/p>\n
Concentration of the economy in the hands of a few
\nbusinesspeople, especially those who were close to former
\npresident Soeharto, is widely cited by analysts as a major cause
\nof the country's unprecedented economic crisis.<\/p>\n
Concentration of ownership in the banking sector, for
\ninstance, allowed between 70 percent and 100 percent of bank
\nloans to be channeled to affiliated business groups, a violation
\nof the sound lending policy.<\/p>\n
The banking sector is saddled with a massive amount of
\nnonperforming loans, constituting about 50 percent of those still
\noutstanding. (rei)<\/p>",
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"sponsor": "Okusi Associates",
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