Indonesia warned of widening economic gap<\/p>\n
JAKARTA (JP): Indonesia, whose gap between the poor and the
\nrich has become notorious in the last two decades, received
\nanother warning yesterday following the remark of a senior
\neconomist, Sumitro Djojohadikusumo, about the issue.<\/p>\n
"I immediately read this eye-catching statement," State
\nMinister of Research and Technology B.J. Habibie said yesterday.<\/p>\n
The 77-year-old Sumitro suggested on Wednesday that the
\ngovernment found an investment fund to help small and medium-
\nscale businesses compete with the bigger ones.<\/p>\n
"The bank usually prefers to give credits to a certain group
\nof companies," said the professor, referring to big businesses --
\nparticularly those owned by prominent Chinese businessmen.<\/p>\n
"A state-owned bank even gave Rp 2.8 trillion (US$1.3 billion)
\nin credits to just two tycoons. We cannot put ourselves at risk
\nby allowing this group to control state assets," he said.<\/p>\n
Habibie told reporters yesterday that Sumitro had
\nrealistically described the situation and called on the people to
\nprevent the widening of social gap and to find a peaceful
\nsolution.<\/p>\n
The Chinese-Indonesian community, which accounts for only
\naround 3 percent of the country's total population of over 180
\nmillion, has played a dominant role in the economic life of this
\ncountry over the last three centuries since the Dutch colonial
\nperiod.<\/p>\n
Combined with the ethnic and religious differences, the
\nbusiness gap has transformed itself into a social gap which
\nperiodically erupts into riots.<\/p>\n
Sumitro, an in-law of President Soeharto, said that the
\ngovernment should have the political will to establish an
\ninvestment fund.<\/p>\n
Referring to a similar fund under the new economic policy of
\nMalaysia, he said that the proposed fund will encourage
\ninvestment in small-scale businesses which will later narrow the
\nsocial gap.<\/p>\n
Other analysts, Laksamana Sukardi, a former executive of Lippo
\nBank, Christianto Wibisono, the director of the Indonesian
\nBusiness Data Center (IBDC), and Arief Budiman, a lecturer at the
\nSalatiga-based Satya Wacana Christian University in Central Java,
\nhowever, told The Jakarta Post yesterday that the government
\nshould learn from past experience before establishing such an
\ninvestment fund.<\/p>\n
"The proposal was made out of desperation over the regular
\nbanking procedures," Laksamana said, referring to the failures of
\nthe government to force Indonesian banks to channel some 20
\npercent of their loans to small-scale businesses.<\/p>\n
"It would be another political consumption if the government
\ngave no guarantee behind the investment fund," Laksamana said. He
\nadded that such a fund should be exempted from tax, transparently
\nmanaged, capitalized with public investments and providing
\ngreater yields than banking deposits to make it a worthwhile
\nproject.<\/p>\n
Arief Budiman, however, raised the question whether Indonesia
\ncould follow the path of Malaysia, saying that Sumitro tries to
\ninvite the state to intervene in the ongoing market mechanism to
\nminimize the impact of capitalism.<\/p>\n
"The requirement of such an intervention is a clean
\nbureaucracy, with no abuse of power," Arief said. He added that
\nMalaysia could achieve its new economic policy because it has a
\nrelatively clean bureaucracy which is totally different from the
\nIndonesian.<\/p>\n
"It is not a matter of a free market, but one of the man
\nbehind the gun," he added.<\/p>\n
Christianto said that democracy and openness are the
\nprerequisites of dealing with the problem of the gap between rich
\nand the poor.<\/p>\n
He said that instead of the business gap, he warned about the
\ngap between the Chinese and the other groups in the fields of
\npolitics, culture and lifestyle. (09)<\/p>",
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