Bappenas' role comes into question

JAKARTA (JP): Chairman of the National Development Planning Board (Bappenas) Ginandjar Kartasasmita hinted yesterday that it might be necessary to review the role of the board as the government loosens its grip on the private sector.

"Our economy is getting more privatized and the government no longer controls most production sectors. That raises questions about the likely future role of Bappenas," he told a development planning seminar at his office.

Ginandjar, also the minister for national development planning, said that the private sector is becoming so strong that it can either accept or ignore government policies as it pleases.

"When we introduced minimum wages for workers, for instance, many businessmen said they would move their businesses abroad," he said.

The seminar, attended by economists, prominent businessmen and media figures and representatives of non-governmental organizations, discussed the role of development planning in the current era of globalization.

Ginandjar pondered whether inadequate development planning was partly responsible for the widening gap between rich and poor in Indonesia.

"That's why I invited you here, so that we can thoroughly and vigorously discuss the issue," he told the seminar.

Last week, the owners of almost 100 of the country's largest business groups gathered in Bali to exchange ideas about how the widening disparity between the poor and the rich might be addressed.

Among the participants yesterday were economists Christianto Wibisono, Dorodjatun Kuntjoro-Jakti, Adi Sasono, Didik J. Rachbini, Faisal Basri, Mari E. Pangestu, Rizal Ramli and Sjahrir; publisher of the Kompas daily Jakob Oetama; Samsul Basri of the Suara Karya daily; businessmen Sofyan Wanandi, Aburizal Bakrie, Theodore Permadi Rachmat, Fahmi Idris and Arifin Panigoro; and, representing NGOs, Bambang Ismawan and Bambang Wiwoho.

Many participants at the seminar raised the issue of the widening disparities between rich and poor, between the central government and local administrations and between the western and eastern provinces of Indonesia.

Decentralization

Faisal Basri, an economist at the University of Indonesia, suggested that Bappenas speed up the decentralization process so that local administrations would be more autonomous in developing their areas.

"Look, more than 94 percent of the national income is spent by the central government and less than six percent is allocated to local administrations. If the state budget is virtually monopolized by the central government, how can the local administrations develop their areas with local initiatives and autonomy?" Faisal asked.

Economist Sjahrir called for more democratization of the country's economy, saying the government is still reluctant to abolish its monopolies over several basic commodities, such as wheat and sugar.

Sjahrir said that the government appeared to be indulging in self-congratulatory complacency over the impressive economic indicators, such as the rates of growth and investment.

"But the government seems to ignore the vital aspect of equity," he added.

Some participants complained about Bappenas' perceived shrinking role and decreasing clout in the country's development.

Businessman Sofyan Wanandi, for instance, said that the current Bappenas seems to be much weaker and less influential than that headed by Widjojo Nitisastro (in the 19670s and 1980s).

Ginandjar responded that the comparison was unfair because he is not concurrently holding the portfolio of coordinating minister for economic affairs, as Widjojo did when he led Bappenas.

"What Pak Widjojo held at that time is now taken up separately by three ministers: Myself as chairman of Bappenas, Saleh Afiff as coordinating minister for economy and finance and Hartarto as coordinating minister for industry and trade," Ginandjar said.

Inequity

Businessman Fahmi Idris blamed growing economic inequity on monopolies and oligopolistic practices which, he said, have been distorting the market economy.

"The government seems unable to cope with those economic distortions," Fahmi told the meeting.

He said that even common people were fully aware of the irregularities and bad business practices which benefit only a few.

He warned that pent-up frustration on the part of ordinary people might explode in a massive outburst of anger, such as occurred many years ago.

Adi Sasono of the Center for Information and Development Studies concurred that the current inequity had been generated by what he described as the government's preferential treatment of a few business groups.

He hailed the market economy principle the government has been pursuing over the past 10 years, but nonetheless urged the government stop its "excessive" intervention in order to allow normal market mechanisms to operate.(rid/vin)