Minister pledges to abide by IMF-backed reform program<\/p>\n
JAKARTA (JP): Minister of Industry and Trade Mohamad (Bob)
\nHasan promised yesterday that he would abide by the terms of the
\nIMF-backed reform program which diminishes the power of the
\nhighly controversial Association of Indonesian Wood Panel
\nProducers (Apkindo) which he used to head.<\/p>\n
Hasan said Apkindo would no longer serve as a joint marketing
\nbody for plywood companies because its function in that capacity
\nhad been ended when the government implemented a reform agreed
\nwith the International Monetary Fund on Jan. 21.<\/p>\n
\"Now all plywood trade is free, all companies can export or
\nsell as they want, they don't have to be members of Apkindo and
\nthey can export their products through any shipping line they
\nchoose,\" he said.<\/p>\n
However, Hasan was quick to reiterate that Apkindo was not a
\ncartel or monopoly, but a joint marketing body designed to help
\nmonitor and control locally-produced plywood.<\/p>\n
Apkindo was set up in 1984 under a trade ministerial decree.<\/p>\n
Apkindo Chairman Abbas Adhar, who replaced Hasan last week,
\nsaid yesterday the association was formed to increase the
\nbargaining power of plywood producers amid falling plywood
\nprices.<\/p>\n
\"At the time we were being played against each other by
\nforeign parties, so that competition made our prices very low,\"
\nAbbas said.<\/p>\n
However, many plywood producers viewed Apkindo as a rent-
\nseeking cartel, not an organization designed to altruistically
\nset prices, production quotas and fees for plywood exports.<\/p>\n
Apkindo obliged all companies to export through trading arms
\nwhich it set up in various regions.<\/p>\n
Furthermore, under the marketing scheme, plywood exports had
\nto leave Indonesia via two shipping companies partially owned by
\nHasan.<\/p>\n
Abbas said economic reforms, agreed in exchange for US$43
\nbillion in aid, made it impossible to maintain these practices.<\/p>\n
\"We are now merely a business forum which keeps our members
\ninformed of industry developments,\" he said.<\/p>\n
Abbas said plywood sales had been sluggish this year due to
\neconomic difficulties in several of Indonesia's largest markets,
\nincluding Japan and South Korea.<\/p>\n
He estimated exports would fall to 6 million cubic meters this
\nyear, down from 8.5 million cubic meters last year. The value of
\nexports is expected to fall to about US$2 billion, down from
\nUS$3.5 billion last year.<\/p>\n
Hasan also said yesterday that his ministry had no plans to
\nlift the ban on the export of crude palm oil and its derivatives,
\nimposed in January, until there were clear signs that product
\nprices had stabilized and supplies were sufficient. (das)<\/p>",
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"sponsor": "Okusi Associates",
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