Experts suggest protectionist measures removal<\/p>\n
JAKARTA (JP): The phased removal of the protectionist measures
\nwhich have helped large firms grow fat in the past decade would
\nstrengthen Indonesia's down-stream businesses, which in turn will
\npush the growth of up-stream industry, an economist says.<\/p>\n
Speaking at the second day of a three-day seminar on
\n"Strategies to Resolve Unemployment" yesterday, noted economists
\nMari Pangestu and Rizal Ramli said that the government should cut
\nback on protectionist measures to boost the competitiveness of
\nlarge export-oriented, labor-intensive and down-stream
\nindustries.<\/p>\n
Open and healthy competition will drive them to use local raw
\nmaterials instead of imports, thus boosting the growth of medium
\nand small scale firms, Mari said.<\/p>\n
Rizal concurred that the reason big conglomerates shun local
\nraw materials is not only the differences in cost and quality,
\nbut also the heavy protection given them by the government.<\/p>\n
"Reducing the protections can be seen as a move to promote the
\nefficiency of the companies and is also in line with the General
\nAgreement on Tariffs and Trade (GATT)," Mari said.<\/p>\n
Rizal said there should be a neutral trade policy in the
\nfuture which does not differentiate between large, medium and
\nsmall scale companies.<\/p>\n
The current regulations, he said, give a lot of protection to
\nlarge firms but hardly any to medium and small ones.<\/p>\n
Head of the Agency for Financial and Monetary Analysis at the
\nministry of finance Dono Iskandar Djojosubroto, said, however,
\nthat the preparation of the new deregulation package which the
\ngovernment intended to issue about three months ago was not an
\neasy task.<\/p>\n
"Each of the government institutions involved in the
\nderegulation team has different perspectives and interpretations
\nas to how far the deregulation should go. Making a set of rules
\nwhich makes everyone in the room happy is not easy," he admitted.<\/p>\n
Dono assured that despite the differences, all government
\ninstitutions share the desire to cut back on protectionist
\nmeasures, high economic costs and increase efficiency.<\/p>\n
Manpower<\/p>\n
Mari believes that within the next five to ten years, manpower
\nwill remain one of Indonesia's greatest assets.<\/p>\n
"We must remember that what we want is a good-quality growth,
\nnot growth for the sake of growth itself," Mari said.<\/p>\n
Manpower, she pointed out, should therefore be used as
\noptimally as possible to help lift the country to a higher, more
\nindustrious level.<\/p>\n
According to her, the current minimum wage does not need to be
\nincreased.<\/p>\n
"Don't concentrate too much on the minimum labor wage because
\nit can be counterproductive, since Indonesia has in fact a
\nsurplus of labor," she said, adding that higher labor wages could
\nreduce the country's competitive edge.<\/p>\n
She said that other countries such as Vietnam and China could
\neasily take over the competitive advantage if wages soar too
\nhigh.<\/p>\n
Mari instead suggested that the government and company
\nmanagers put more emphasis on improving the conditions of labor,
\nsuch as rules on over-time payment and pregnancy leaves.(10)<\/p>",
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