Government intervention in economy still needed<\/p>\n
By Prapti Widinugraheni<\/p>\n
MEDAN, North Sumatra (JP): The 13th congress of the Indonesian
\nEconomists Association (ISEI) closed here yesterday with its
\nparticipants agreeing to the inarguable need for government
\nintervention in the country's economic system.<\/p>\n
The participants also noted the need for the government to
\nmanage the country's macroeconomics and, at the same time,
\nsupervise the manufacturing sector to achieve sound development.<\/p>\n
\"Maintaining consistency and a link between macroecomonic and
\nmicroeconomic policies is increasingly important for the country
\nto survive in a competitive market,\" a statement issued at the
\ncongress' closing session read.<\/p>\n
It was for this reason that the economists considered
\nderegulatory and bureaucracy-reduction measures should continue
\nto be carried out. Such measures, they said, will increase the
\nflexibility of the country's overall economic process and, in
\nturn, strengthen Indonesia's economic competitiveness.<\/p>\n
The congress unanimously reelected yesterday Marzuki Usman as
\nISEI chairman for a second term, which will end in 1999. ISEI's
\ncentral board member list will be completed in a month.<\/p>\n
The three-day congress discussed topics related to the
\nchallenges faced by a managed market economy in entering the 21st
\ncentury.<\/p>\n
Congress participants also agreed that the deregulations
\nissued so far by the government have resulted in new challenges
\nfor the government because such measures are expected to help
\nprotect the public from unhealthy competition and maintain an
\neconomic-democratization process.<\/p>\n
The congress also noted the important need to create and
\ndevelop good governance and fair business practices -- both on
\nthe part of the government and private sector -- as a way to
\nimprove existing economic institutions.<\/p>\n
\"In short, the most appropriate response to the challenges of
\nthe 21st century is to create structural conditions and economic
\nprocesses which lead to the concept of 'getting prices and
\ninstitutions right',\" the statement read.<\/p>\n
The topics discussed during the congress included the money
\nand capital markets, the manufacturing sector, the agricultural
\nsector, the managed-labor market and business partnerships.<\/p>\n
On the money and capital markets, the congress noted that the
\nincreasing flow of capital into Indonesia required better
\neconomic management through improved monetary and fiscal systems.<\/p>\n
\"Stabilization efforts (for the macroeconomic system) need to
\nshow more budgetary disciplines and more dynamic fiscal
\nmanagement,\" it stated.<\/p>\n
Any government intervention, however, should not cause new
\ndistortions but instead, create market infrastructure that can
\nhelp the market operate more efficiently.<\/p>\n
On the manufacturing sector, the congress stated the recent
\ndrop in this sector's competitiveness has become a major concern
\nto national producers.<\/p>\n
Apart from that, the concentration of resources to a limited
\nnumber of industries has resulted in pricing rigidities which, in
\nturn, may cause disadvantages not only for consumers but for
\nproducers -- particularly foreign ones -- as well.<\/p>\n
\"Nonprice competitions have also become a factor that cuts
\nback on the competitiveness of this sector. The concentration of
\ncompanies operating on the domestic market has raised doubts as
\nto whether or not they can compete on the international market,\"
\nthe statement read.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-intervention-in-economy-still-needed-1447893297",
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"sponsor": "Okusi Associates",
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