Bulog says it will change with the times

Bulog says it will change with the times

JAKARTA (JP): Beddu Amang, the chairman of the National
Logistics Agency (Bulog) which regulates the country's food crops
and several commodities, says that his office will deregulate its
activities and modify its role in line with international trade
liberalization.

"A combination of new budgetary realities, new World Trade
Organization rules and major structural changes in the Indonesian
economy in the past quarter century has re-focused attention on
Bulog's future mission," Beddu said yesterday during a seminar
sponsored by a traditional critic of the agency, the World Bank.

More importantly, he said, an open trade regime would help the
Indonesian economy to be more efficient and therefore more
competitive.

The chairman said that, in the case of Indonesia's main
staple, rice, the agency might still be needed to stabilize
prices and secure supply, in order to maintain food security.

"We should not lose sight of the important research that has
demonstrated how the stabilization of rice prices made a
significant contribution to the overall growth of the Indonesian
economy," he said.

Bulog, which was established in 1967, has been credited by
various analysts with a key role in Indonesia's achievement of
rice self-sufficiency in 1984. Indonesia had been the world's
biggest rice importer for decades previously.

However, the agency's grip on the importation and distribution
of wheat, sugar, soybeans and corn has been widely criticized by
many commentators, including the World Bank, as being inefficient
and counter-productive.

Several participants in yesterday's seminar, including
economist Martin Panggabean, also criticized the agency for never
publishing its accounts.

Beddu said yesterday that Bulog would soon deregulate various
non-rice commodities over which it currently exercises monopoly
control.

"The case for deregulation of the feed and livestock sector is
clearer...a high cost-feed industry is a major burden in
developing an efficient agri-business sector," he admitted.

That view was echoed yesterday by Bulog's Chrisman Silitonga.

"It is evident that under trade restrictions (in the form of
import licensing) the government has sacrificed consumer welfare
by taxing imported soybeans and soymeal," Chrisman said in a
paper he presented to the seminar.

Beddu also said yesterday that Bulog would address the
transparency issue, adding that his agency did not want to be
"part of the high-cost economy."

"As a first step, more transparent management of Bulog's
trading activities will be instituted," he said.

Beddu warned, however, that "Bulog does not expect to be
privatized as part of a deregulation drive".

He said providing food security was a public sector role that
had to be implemented by a public sector body funded by public
sector revenues. (hdj)