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)