'Create more firms to limit monopoly'<\/p>\n
JAKARTA (JP): The country needs a national consensus to
\nrestrict monopolistic practices by limiting the expansion of
\ncompanies with more than 50 percent of local market share, says
\nState Minister of Research and Technology B. J. Habibie.<\/p>\n
Speaking at a seminar organized by the committee of the 1995
\nIndonesian Product Exhibition at the Jakarta Fairground
\nyesterday, Habibie said that if such a consensus is reached, more
\nenterprises will be created to help ensure fairer competition
\nand, at the same time, reduce the concentration of businesses in
\nthe hands of certain companies or conglomerates.<\/p>\n
He said that, for instance, if a company already controls 90
\npercent of market share for a certain product, it could reduce
\nits standing by expanding into other sectors in which it has
\nlittle or even no control.<\/p>\n
\"In this way, more companies can be created,\" Habibie said.
\n\"No need for an anti-trust law to break down a monopoly. It is
\nenough to create more companies in the monopolized sector,\" he
\nsaid.<\/p>\n
The government is currently drafting regulations on the
\nexpansion of large businesses with domestic market shares of more
\nthan 50 percent, following public debate on the issue.<\/p>\n
The issue broke early last month when State Minister of
\nInvestment Sanyoto Sastrowardoyo said in a hearing with the House
\nof Representatives' manufacturing and investment commission that
\nhe would no longer issue expansion licenses to companies which
\ncontrolled more than 50 percent of the domestic market in
\nrelation to a particular good or service.<\/p>\n
While Sanyoto's statement was welcomed by legislators, it was
\ncriticized by large business groups, who claimed that such
\nrestrictions would reduce their competitive edge in the
\ninternational market.<\/p>\n
Habibie said yesterday that creating more and more companies
\nwas also important in increasing national productivity and
\nefficiency in the era of globalization.<\/p>\n
\"Even a company needs sparring partners to increase its
\nproductivity and efficiency as well as to prepare itself to enter
\nglobal competition. In a monopoly, however, there are no sparring
\npartners as there is only one performing company,\" he said.<\/p>\n
\"I'm not anti-monopoly. As long as the monopoly can create
\nproductivity and efficiency just go ahead,\" Habibie said.
\n\"However, monopolistic companies usually exist only in communist
\ncountries and most of them have collapsed.\"<\/p>\n
Habibie said that Indonesian companies had to develop value-
\nadded and cost-efficient strategies to enter global competition.<\/p>\n
To win in competition, Habibie said, a company needs to focus
\non increasing the quality of its products and on reducing costs.<\/p>\n
\"Productivity, efficiency, value-added and cost-added...
\nthat's the real language.... Don't rely too much on statistics.
\nStatistics are interesting but mean nothing,\" he said.<\/p>\n
Other speakers at yesterday's seminar included Coordinating
\nMinister for Industry and Trade Hartarto and State Minister of
\nNational Development Planning Ginandjar Kartasasmita.<\/p>\n
Hartarto said small and medium-sized enterprises need to be
\ndeveloped to reduce the domination of large enterprises so that,
\nin the long run, they will become the basis of Indonesia's
\neconomy.<\/p>\n
\"The role of small and medium-sized enterprises is very
\nstrategic, especially for the country's economic growth as well
\nas the distribution of wealth,\" Hartarto said.<\/p>\n
Small and medium-sized firms are particularly in need of the
\ngovernment's assistance when it comes to acquiring bank loans and
\nimproving their human resources, Hartarto said.<\/p>\n
Ginandjar, who presented a paper on efforts to develop
\ntraditional products, said small and medium-sized enterprises
\nwhich make traditional products also need help in acquiring
\nmarket niches and technology.<\/p>\n
\"Traditional technologies reflect traditional culture....
\nHowever, traditional products can be produced using modern
\ntechnology in a modern society,\" he said. (rid)<\/p>",
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