New reform package criticized<\/p>\n
JAKARTA (JP): The Indonesian Chamber of Commerce and Industry
\n(Kadin) criticized yesterday the May 23, 1995, package of
\neconomic reform measures for not significantly reducing trade
\nbarriers which have been hurting consumers.<\/p>\n
\"We don't think the non-tariff import barriers on soymeal,
\nwheat flour, sugar, clove and salt are justifiable,\" the
\nchamber's vice chairman, Iman Taufik, said.<\/p>\n
Taufik noted that the non-tariff barriers on those commodities
\nhave been imposed, supposedly, in the interests of consumers.<\/p>\n
\"But in the end consumers and industrial users have been hurt
\nby those trade barriers because they have been forced to pay
\nhigher prices for those commodities,\" he said in a statement
\nreflecting the chamber's comments on the latest package of
\nderegulation measures.<\/p>\n
The package reduced tariffs on more than 6,000 items, opened
\nseveral new business areas to foreign investors and removed non-
\ntariff barriers to imports of 81 items.<\/p>\n
But the measures have not touched upon those commodities as
\nreferred to by the chamber and they remain under the monopolies
\nof the National Logistics Agency (Bulog) and several private
\ncompanies owned by politically well-connected businessmen.<\/p>\n
\"The chamber actually is not objecting to trade barriers or
\nmonopolies as those held by Bulog, if they are truly aimed at
\nprotecting consumer interests,\" Taufik said.<\/p>\n
\"But what we cannot understand is why Bulog's monopolies on
\nwheat flour and soymeal have been granted to private companies
\nwithout clear-cut, transparent procedures,\" he added.<\/p>\n
Therefore, the chamber urges the government to abolish those
\ntrade barriers (monopolies) because they have become the main
\ncomponents of the high cost economy.<\/p>\n
Competitive bids<\/p>\n
\"If the government wants to grant such monopolies to private
\ncompanies, that should be done openly, through competitive bids,\"
\nTaufik said as quoted by the Antara news agency.<\/p>\n
The wheat grain milling monopoly held by PT Bogasari Flour
\nMills, which is controlled by Sudono Salim, and the soybean
\ncrushing monopoly held by PT Sarpindo, which is owned by
\npolitically well-connected businessmen, have often been attacked
\nas rent seeking businesses at the expense of consumers.<\/p>\n
The World Bank's 1994 Report on the Indonesian economy also
\ncontained a special analysis on the negative impact of the
\nsoybean crushing monopoly and soybean trade monopoly.<\/p>\n
Last month, a World Bank-sponsored seminar on the Indonesian
\neconomy also presented a special paper by Jacqueline L. Pomeroy,
\na consultant to the trade ministry who criticized the monopolies
\nas quite detrimental to the development of livestock and poultry
\nin Indonesia.<\/p>\n
Pomeroy observed that the soybean crushing fee set for the
\nprivate company had been unusually high.<\/p>\n
Moreover, she added, the private monopoly had gained
\nadditional profits from the crushing because it always retained
\nthe cooking oil as a byproduct of the processing.<\/p>\n
In a related development, Adi Putra Tahir, former chairman of
\nthe Association of Young Businessmen, stressed the crucial
\nimportance of implementing all those reform measures.<\/p>\n
\"Those reform measures would be rendered useless if their
\nimplementation increased, instead of reduced, the costs of doing
\nbusiness,\" Tahir argued. (vin)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-reform-package-criticized-1447893297",
"image": ""
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