Businesses to monitor post-IMF programs

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.