Antimonopoly law on the cards for next year
Antimonopoly law on the cards for next year
JAKARTA (JP): A bill on fair business competition is expected
to be submitted to the legislature before the end of December and
become law early next year, in accordance with the schedule of
the bailout agreement with the International Monetary Fund (IMF).
Secretary-general of the Ministry of Trade and Industry Aidil
Yuzar said yesterday introduction of the bill -- also known as
the antimonopoly bill -- was part of the effort to create fair
competition in all business activities.
"The drafting team will meet a team from the DPR (House of
Representatives) before the end of this year," he told reporters
at a seminar.
He explained the bill was designed to create an efficient
market economy, consumer protection and prevent economic
concentration among certain business groups.
"The bill will also prohibit collusive agreements, like price
fixing between businesses." He added the provision would help
prepare the country's business sector for the implementation of
the Asian Free Trade Area by 2003.
He conceded the definition of monopoly was still a major issue
in designing the competition policy.
"Should 40 percent market domination be considered a monopoly
or should the limit be 75 percent," he said of the quandary.
He added that another major issue was whether to allow a
monopoly for certain economic sectors as long as it was intended
for the welfare of the people.
"The Constitution allows a monopoly on production sectors that
control the needs of many people, like water." He said the state-
owned fertilizer makers, water supply company and train operator
would retain their monopoly status.
The government received technical assistance from the USAID,
Asian Development Bank and the World Bank in drafting the
competition bill, he said.
An independent Fair Trade Commission would be established to
ensure the law is implemented, he added.
"The members of the commission will be selected by the DPR and
report directly to the President."
Concentration of the economy in the hands of a few
businesspeople, especially those who were close to former
president Soeharto, is widely cited by analysts as a major cause
of the country's unprecedented economic crisis.
Concentration of ownership in the banking sector, for
instance, allowed between 70 percent and 100 percent of bank
loans to be channeled to affiliated business groups, a violation
of the sound lending policy.
The banking sector is saddled with a massive amount of
nonperforming loans, constituting about 50 percent of those still
outstanding. (rei)