Bulog chief defends price-stability policy
JAKARTA (JP): National Logistics Agency (Bulog) chief Beddu Amang yesterday lashed out at members of the World Trade Organization (WTO) who link price-stabilization policies with protectionism, saying the two are "fundamentally distinct concepts".
Speaking at the Asia International Rice Conference in Singapore, Beddu said the benefits of price stability, particularly for food, were important.
"Unfortunately, in my opinion, many member nations of the WTO seem to equate stabilization with protection. As a result, stabilization instruments, such as variable import levies, have been declared illegal," he said in his speech, also sent to The Jakarta Post.
He acknowledged that although protection and stabilization sometimes went hand in hand, the two were fundamentally different.
He said Bulog's price-stabilization program had shielded Indonesia's economy from much of the instability on the world rice market without systematically protecting consumers or producers.
In times of high international prices, he said, Bulog's market operations had helped protect consumers, and that farmers were protected when prices went down.
Defending Bulog's role in Indonesia's economy, Beddu said its operations did not represent continual changes in government policy or the strength of interest groups.
"Instead, this pattern reflects a consistent long-term vision that we have successfully implemented for more than 25 years," Beddu said.
WTO Deputy Director General Anwarul Hoda acknowledged at an Asia Pacific senior officials meeting here last month that commodity trading by state agencies was being criticized by several WTO members for causing trade distortions.
Some countries had expressed concern over the problems of state trading and proposed that it be "looked into in greater detail in the next round of agricultural negotiations in 1999 or earlier," Hoda said.
Bulog, established in 1967, controls the distribution of several important commodities to assure food security.
The government designated the agency as the sole importer and distributor of rice, sugar, wheat and corn and other commodities.
The media scrutinized the agency last year after a harsh drought in 1994 cut Indonesia's rice production by 4 percent to 46.40 million tons of unhusked rice, forcing Indonesia to import rice.
Many analysts believe the role of Bulog will decline over the next five to 10 years, and is likely to be restricted to managing rice stocks for poverty alleviation.
Other analysts, although questioning Bulog's closed financial management, agree that the price-stabilization policy was fruitful in the 1980s, evidenced by the realization of domestic rice self-sufficiency in 1983.
In terms of assets, Bulog is believed to be one of the country's richest state enterprises. (pwn)