Govt acts to enforce reforms<\/p>\n
JAKARTA (JP): The government acted yesterday to enforce
\nseveral reforms agreed with the International Monetary Fund last
\nweek by issuing a series of decrees and rules formalizing the
\nmeasures.<\/p>\n
The government will also present the revised 1998\/1999 draft
\nstate budget based on the new reform package to the House of
\nRepresentatives tomorrow, Minister of Finance Mar'ie Muhammad
\nsaid yesterday.<\/p>\n
Mar'ie said he was ordered by Soeharto to represent him in
\nunveiling the amended budget to the House.<\/p>\n
"I need to emphasize that the revised budget will remain
\nbalanced and dynamic, there is no change at all to the
\nprinciples," Mar'ie said after attending an economic meeting
\nchaired by Soeharto at the President's Bina Graha office.<\/p>\n
The President presided over the first meeting of the Economic
\nand Monetary Resilience Council yesterday to finalize the revised
\nbudget and to follow up on the Jan. 15 reform package.<\/p>\n
The council is chaired by Soeharto with economic advisor
\nWidjojo Nitisastro acting as secretary-general and Director
\nGeneral of Tax Fuad Bawazier as Widjojo's deputy.<\/p>\n
Its members include former economic minister Radius Prawiro,
\nchairman of the Federation of Private Domestic Banks A. Subowo
\nand president of PT Bakrie & Brothers Tanri Abeng.<\/p>\n
Seven ministers, including the minister of finance and
\nMinister\/State Secretary Moerdiono and Minister for National
\nDevelopment Planning Ginandjar Kartasasmita , were appointed ex
\nofficio members.<\/p>\n
The revised draft state budget, which will come into effect
\nApril 1, envisages zero economic growth, 20 percent inflation and
\nan average rate of Rp 5,000 to the American dollar.<\/p>\n
"But we will do our best to achieve some degree of economic
\ngrowth by boosting rupiah spendings to generate jobs and
\ninvigorate the domestic market demand," Mar'ie said.<\/p>\n
"The President has signed seven presidential decrees, six
\npresidential instructions and three government regulations to
\nenforce several points of the reform," Minister of Industry and
\nTrade Tunky Ariwibowo said yesterday.<\/p>\n
Presidential Decree No. 20 revokes the exemptions of import
\nduty, value added tax and luxury sales tax on the national car
\n(Timor) and Presidential Decree No. 21 abolishes the clove
\nmonopoly of BPPC and dismantles the agency. Both the monopoly
\nagency and the national Timor car project are controlled by
\nSoeharto's youngest son, Hutomo Mandala Putra.<\/p>\n
Presidential Decree No. 22 liberalizes the import of new and
\nused merchant and fishing vessels without prior permit from the
\ngovernment.<\/p>\n
Government Regulation No. 14 exempts the luxury sales tax from
\nlocally-assembled automobiles with a minimum local content of 60
\npercent, Government Regulation No.15 allows industrial foreign-
\ninvestment enterprises to sell their products in the retail
\nmarket. Government Regulation No. 16 allows foreign trading
\ncompanies to operate in retail trade.<\/p>\n
Presidential Instruction No. 3 bans state aircraft
\nmanufacturer IPTN, headed by B. J. Habibie, from receiving funds
\nfrom the state and from obtaining government-guaranteed loans and
\nPresidential Instruction No.4 revokes the local-content rule on
\ndairy (milk) products.<\/p>\n
Presidential Instruction No. 5 revokes the obligation of
\nfarmers in particular areas in Java to grow sugar cane and
\nPresidential Instruction No. 6 frees foreign investment in oil
\npalm plantations.<\/p>\n
Other rules issued yesterday grants full autonomy to the
\ncentral bank, frees plywood producers and makers of other wood
\nproducts to deal directly with foreign buyers and export their
\nproducts without going through their trade associations, bans the
\ncollection of levies on exports, free trading and movement of
\nfarm products across districts and provinces and restrict the
\ntrading monopoly of the State Logistics Agency to only rice.<\/p>\n
Meanwhile, Mar'ie told foreign correspondents last night,
\nthe government was committed to helping private companies settle
\ntheir offshore debts.<\/p>\n
The government would do its best to help the special team
\nheaded by former economics minister Radius Prawiro to resolve the
\noffshore corporate debts, which reportedly stood at about US$65
\nbillion as of last September.<\/p>\n
"The government will not sit still through this problem, we
\nwill help the team with its task," Mar'ie said,<\/p>\n
Mar'ie said the foreign debt of Indonesian businesses was
\ncomplex and hard to manage as it dealt directly with foreign
\ncreditors.<\/p>\n
"Unlike South Korea, where loans were channeled through banks,
\nthe offshore debt here is less transparent although the amount is
\nless than that of the Korean private sector," he said.<\/p>\n
Mar'ie, Tunky and Widjojo briefed foreign journalists last
\nnight on the government's latest measures and decrees to
\nimplement the economic reforms agreed with the IMF last week.<\/p>\n
At the media briefing, Widjojo dismissed the idea that issues
\nrelated to the presidential election had triggered the collapse
\nof the rupiah against the U.S. dollar in the past two days.<\/p>\n
"The ups and downs of a currency depend on many things. It is
\nwrong to link the sharp fluctuation to only one factor," he said.
\n(prb\/das)<\/p>",
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