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)