Bureaucracy told to reduce its monopoly

Bureaucracy told to reduce its monopoly

JAKARTA (JP): Former Australian Prime Minister Paul Keating
said yesterday Indonesia should reduce the monopolistic role of
its bureaucracy to become more globally competitive.

Speaking at a one-day seminar on the challenges of increasing
Indonesia's competitiveness, Keating said that instead of
dominating businesses, the bureaucracy should try to be as
competitive as the companies, businesses and industries they
governed.

"The challenge, like the bureaucracy of all countries in the
area, is that ... with globalization, assets are going to flow to
the countries which are most adept at using them, where the
public policies are best managed," he said.

"So the days when bureaucracies could be monopolies, smug
monopolies, as I think, finishes."

Keating said that while this was a challenge for Indonesia, it
would also be a challenge for other countries.

"There's no comfortable or protected life of bureaucracies
anymore. They are going to be as exposed and need to be as
competitive as any other sector," he said.

Keating said Indonesia's bureaucracy should move toward a
broader based decision making process, away from a top-down
approach.

Top-down approaches normally happened in countries which were
in earlier stages of development and had immature economies and
business structures, he said.

In such situations decisions "tend to fade and gravitate to
the top", he said.

"As the economy gets more sophisticated and the base gets
larger, its important that the decision-making bureaucracy
happens more broadly and that all small incremental issues don't
go to decision makers at the top," he said.

"I think it's probably an Asian characteristic ... but it will
be part of a challenge for Indonesia," he said.

Keating said that by broadening the base of decision-making,
the people in the top levels of the bureaucracy could focus
entirely on strategic issues and policies and not the day-to-day
activities, he said.

Bill Russell, director of Melbourne's Monash University
graduate school, said the government had to pursue efforts to
create a uncorrupt civil service by paying competitive salaries
to improve the country's competitiveness.

He said the government should establish pay rates for civil
service leaders to attract talented and professional people to
the civil service.

"We all need to understand that pay is a guarantee of their
commitment to their jobs," he said.

The creation of a merit-based uncorrupt civil service would
serve as a key prerequisite for a predictable and transparent
setting to maximize private investment, Russell said.

"Such investors need confidence that their proposals and
projects will be fairly and competently considered by officials
who are appointed on their professional merit," he said.

The director general of state-owned enterprises, Bacelius
Ruru, said the government needed to develop a stable and
transparent legal and regulatory framework to attract more
private investment, both foreign and domestic, especially in
infrastructure.

"A transparent, stable and credible legal and regulatory
framework is critical in attracting private investment, by
protecting private sector investors against unexpected changes in
government policies," Ruru said.

He said the government needed to develop sectoral policies
that promoted competition.

He said the government needed to prioritize and identify
infrastructure projects with due consideration for the potential
role of private sector in infrastructure investment.

To secure maximum benefit from private participation in
infrastructure development, the government should design user
charges which reflected the actual costs of delivering the
service while providing incentives for efficiency, Ruru said.

"User charges and the manner in which they are adjusted need
to be made as transparent and as objective as possible," he said.

Ruru said there should be greater use of competitive tendering
procedures rather than direct negotiation because "competitive
tendering promotes transparency fairness and efficiency". (rid)