Adi faults big business but insists he's no enemy

JAKARTA (JP): Minister of Cooperatives and Small Enterprises Adi Sasono on Wednesday blamed the domination of the economy by a handful of large businesses as the primary cause of the country's current misfortunes.

But Adi said he was not opposed to the idea of big businesses, saying they are an essential part of his vision to develop the economy.

He also said what he called the "people's economy" policy would not be carried out in defiance of the market economy.

He criticized the power of large conglomerates, which in 1997 made up only 0.2 percent of the country's business population but controlled 61 percent of gross domestic product.

"That's the core of the problem in Indonesia. It creates the social problems," he said in a business luncheon hosted by the Indonesian Executives Circle.

He explained that the imbalanced economic structure had widened the gap between the rich and the poor, as the former, in addition to controlling assets, also controlled the decision- making process.

"From the political perspective, the imbalanced structure also leads to vulnerable (political and social) stability. Stability without justice... can easily break up," he said.

"So we have to broaden the economic participation of the people," he said.

He said that one of the methods to achieve that was to boost the role of small business cooperatives in the economy.

The government has promised to allocate Rp 10.8 trillion (about US$1.2 billion) in heavily subsidized loans for small businesses and cooperatives.

Adi's program is incorporated in the so-called people's economy policy, which raised concern that the policy would involve the forced redistribution of the assets of troubled large companies and banks to small businesses.

The program was also criticized as racist, as most of the large businesses are controlled by Indonesians of Chinese origin.

The foreign media has dubbed Adi the most dangerous man in Indonesia.

"Chinese or non Chinese is obviously not an issue here," Adi said.

"All citizens are equal according to our Constitution," he added. "I think the problem started when the previous government used the Chinese businesses as cash cows, granting a lot of facilities and privileges which created resentment among the majority," he said.

"This is one thing that we have to address, so the issue is justice," he added.

He stressed that big businesses played an important role in the people's economy policy.

"We need the big ones because we need the economics of scale and world market penetration," he said, adding that working together with big businesses was part of the condition for small businesses to take off.

He said the government would not take the assets of the large conglomerates, saying the policy aimed at boosting the competitiveness of cooperatives and small businesses, by, among other things, promoting the use of human resources.

He also said that the success of the program required the development of an economy controlled by market forces.

"We can't promote the people's economy if we continue with cronyism as in the past. The people's economy means we have to democratize our economy," he said.

He added, however, that the small businesses would need government protection as the market economy would only take off when all players have an equal footing.

"So my task is also to establish a competitive market economy to make distribution of economic resources more efficient," he said.

He envisioned that increasing the living standards of the poor majority would help prevent social unrest and riots, and would provide a more encouraging environment for big businesses to operate in the country.

"So I'm not a dangerous man at all. I think I'm the best friend of the big businesses," he said.

He also dismissed criticisms that his economic policies were merely meant to gain votes for the upcoming June general election.

"I'll not be running for Golkar or any other political party," he said. (rei)