Seminar tears deregulation package to pieces<\/p>\n
JAKARTA (JP): A seminar of the Indonesian Legal Aid Foundation
\n(YLBHI) yesterday scrutinized the government's controversial
\neconomic deregulation package opening the flood gates to foreign
\ninvestors.<\/p>\n
The main speakers gave a thumbs down.<\/p>\n
\"It's like giving treatment for an incorrect diagnosis,\"
\nremarked Todung Mulya Lubis, a known human rights campaigner who
\nnow practices as a corporate lawyer.<\/p>\n
Economist Rizal Ramli said the deregulation package virtually
\n\"stripped Indonesia naked\" and warned that this strategy may not
\nsucceed in drawing foreign investors, because \"when a naked woman
\nwalks on the street, nobody takes notice.\"<\/p>\n
The deregulation package, popularly known as the PP20\/1994,
\nallows foreigners to own as much as 95 percent equity in various
\neconomic sectors previously reserved for local investors, such as
\ntransportation, power and the mass media.<\/p>\n
Critics of the package have noted inconsistencies between
\nPP20\/1994 and other higher laws, such as the 1967 law on foreign
\ninvestment and the 1982 press law.<\/p>\n
The speakers at yesterday's limited discussion agreed that the
\nderegulation package also runs counter to the spirit of the 1945
\nConstitution, which mandates that the government should retain
\ncontrol in economic fields which affect the lives of many people
\nand manage these areas for the benefit of the people.<\/p>\n
Mulya said the ruling will only promote more monopolies and
\noligopolies, in contravention of the Article 33 of the
\nConstitution. \"They must have misinterpreted the Article 33. They
\nshould have considered the original intentions of our founding
\nfathers who wrote the Constitution.\"<\/p>\n
Adnan Buyung Nasution, YLBHI executive director, stated that
\nthe spirit of Article 33 emphasizes the welfare of Indonesians,
\nwherever they are.<\/p>\n
Acknowledging that Indonesia is obliged to open up its economy
\nunder the General Agreement on Tariffs and Trade, Mulya said the
\npackage is \"overly generous\" to foreign investors.<\/p>\n
He also doubts PP20\/1994 will be effective in attracting
\nforeign investors.<\/p>\n
More effective<\/p>\n
The government should concentrate on establishing good
\ngovernance, because this is more effective than the total
\nliberalization of the economy, he said.<\/p>\n
The contradiction between PP20\/1994 and several other
\nlegislative measures will only deter foreign investors who want
\nlegal security rather than political protection, he said. \"It is
\nbad precedence for the Indonesian legal system. Those who want to
\ninvest here will not feel secure.\"<\/p>\n
Indonesian business laws are not well recognized abroad, he
\nsaid, noting that over 90 percent of international business
\nagreements involving Indonesian companies use foreign legal
\nsystems of either the U.S., Japan, the U.K. or Singapore.<\/p>\n
Rizal, the chairman of the German-Indonesian Business
\nAssociation, said the government moved too hastily in
\nderegulating the economy, probably out of pressure due to rising
\ncompetition for capital from neighboring countries and declining
\noil export income.<\/p>\n
Rather than \"stripping Indonesia naked,\" the government should
\nhave developed more fundamental strategies to attract foreign
\ninvestment, such as improving the political system, strengthening
\nthe legal system and improving Indonesian manpower.<\/p>\n
Both Mulya and Rizal said the House of Representatives (DPR)
\nshould move to overturn the PP20\/1994, or failing that, someone
\ncould apply for a judicial review from the Supreme Court.<\/p>\n
Mulya said he is prepared to help anyone who will take the
\ninitiative.<\/p>\n
Oka Mahendra, the House's member from Commission II, who was
\nalso present at the discussion, said the House has asked the
\ngovernment to review the regulation, but to no avail.<\/p>\n
\"We have tried, but I think PP20 will not be withdrawn because
\nour government is a bit obstinate. So, if possible, you lawyers
\ncan apply for a judicial review,\" Oka said. (11)<\/p>",
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