Businesses to monitor post-IMF programs
Rendi A. Witular, The Jakarta Post, Jakarta
Business lobby groups announced on Wednesday they would closely monitor the implementation of the government's economic reform programs after the current IMF program ends later this year.
The business community has set up a monitoring committee to carry out the job. The chairman of the committee, Sofyan Wanandi, said monitoring the implementation of legal reform in the country was on the priority list for the committee.
The committee said the deliberation of laws should take place only after they have been discussed publicly with stakeholders outside the government, adding that the laws should be more facilitative than restrictive.
Immediate action should be taken to eliminate inconsistencies and contradictions between regional and national regulations or laws, and between government ministries, so that passed regulations or laws can be consistently upheld and honored, the committee said.
The country's weak legal system has been one of the main factors for the poor investment climate here. With the International Monetary Fund is scheduled to end its reform program by the end of this year, there have been concerns that the government might be tempted to backtrack on reforms, particularly in the legal sector.
Sofyan said it was important for the business community to monitor the progress and problems that might arise in the implementation of the various reform measures.
He added the committee would provide the government with input from the perspective of the business community, as a way to improve the implementation of the post-IMF reform programs.
He also explained that the monitoring by the committee was part of efforts to increase pressure when dealing with questionable policies made by the government.
"We cannot just trust the government. We are mostly concerned with the substance of the policies made by the government rather than whether the government can manage to complete its program on time," said Sofyan.
The committee consists of members of the Indonesian Business Chamber of Commerce and Industry, the Jakarta Japan Club Foundation, the American Chamber of Commerce, the International Business Chamber of Commerce and a number of independent economists.
The government has decided not to extend the current IMF program, opting for a postprogram monitoring arrangement (PPM) under which the government will still hold regular consultations with the Fund.
However, the government can design its own reform program. Under the PPM arrangement, Indonesia will not need to repay its loans to the IMF too far ahead of installment schedules.
Businesspeople and analysts said the post-IMF monitoring program was crucial to maintaining investor confidence in the economy.
Other priorities to be monitored by the committee
1. Taxation
- Reform tax administration and improve quality of services to
taxpayers, such as expanding the scope of large tax offices, speeding up tax refunds and establishing independent mechanisms to identify
and address taxpayer rights and concerns.
- Proper and fair implementation of the tax administration.
- Continue the efforts to broaden the tax base.
- Increase Indonesia's tax competitiveness and simplify the
tax structure and rates.
2. Customs
- Reform of customs administration
- Improve the quality of customs officials
- Proper and fair implementation of the customs
administration.
3. Employment
- Finalize the implementation of regulations in manpower law No.
13/2003 through a consultative process.
- Finalize the draft law on dispute settlement in industrial
relations through a consultative process.
4. Energy
- Complete government regulation on Law No. 22/2001 on oil and
gas.
- Amend Law No. 11/1967 on mining
- Set energy pricing by gradually changing energy prices to
reflect the true costs.
5. Electricity
- Prepare draft government regulation to implement Law No.
20/2002 on electric power in consultation with the industry
stakeholders.
- Develop compensation programs for land, building and plants
under electric power transmission lines.
- Gradually adjust electricity rates to reflect the cost of
generating electricity.
6. Small and Medium Enterprises (SMEs)
- Improve SMEs access to funds in banks.
- Reform the present banking regulation and overcome obstacles
in the banking credit system.