Abolishment of monopolies

Senior economist Sumitro Djojohadikusumo has recently recommended the abolishment of monopolies. Coordinating Minister for Economic and Finance Saleh Afiff has said that monopolies will be eradicated. Business tycoon Sudwikatmono welcomes the idea and is ready for the situation. The government must be ready too to bear the consequences of the abolishment of monopolies.

The rate of the rupiah against other currencies has been floated to follow the mechanism of the global market. If monopolies are abolished, it will be in line with the floating of the currency. Thus, commodity prices in Indonesia will also be subject to the mechanisms of the international market.

The consequence is that imports and exports of commodities must also be free. Anybody, if capable, is allowed to import and export goods. Prices of goods and services at home will increase or decrease, depending on international prices. Wheat flour, soybeans, corn, garlic, refined sugar and plastic will decrease in price, because they are cheaper in the global market. On the other hand, cement, cooking oil and paper will become more expensive because their world market prices are higher.

The abolishment of monopolies will possibly push producers at home to work more efficiently, also in the services sector, because they will have to enter into free competition with goods and services from abroad. Raw material and cheap labor in Indonesia will support efforts toward efficiency in the production of goods and services. Naturally, the government must also take stern measures to eradicate all forms of legal and illegal levies, invisible costs which disproportionately increase production cost of goods and services. Workers, civil servants and Armed Forces members must be given higher pay.

Indonesia's tax system must be reviewed. The taxes to be borne by the community, both direct and indirect, should be proportionate to those in neighboring countries. Tax facilities for large-scale businesses must be abolished.

The House of Representatives must immediately pass anti- monopoly and anti-cartel laws. All forms of corruption and collusion must also be eliminated. This is if there is serious intention to cater for the welfare of all the people in Indonesia.

SUHARSONO HADIKUSUMO

Jakarta