Businessmen give cautious welcome to reform package
Businessmen give cautious welcome to reform package
JAKARTA (JP): Businessmen and economists yesterday cautiously welcomed the newly issued deregulatory package, saying that more steps are needed to ensure that its measures meet targets.
Aburizal Bakrie, chairman of the Indonesian Chamber of Commerce and Industry, said that the deregulation would be meaningless if illegal levies charged on business entities were not eliminated.
"It is quite positive, but the government needs to scrap all illegal levies to make business activities really efficient," he told reporters in reaction to the deregulatory package announced by the government on Tuesday.
Aburizal, also chairman of the Bakrie Group, said that the country's high-cost economy could not merely be dealt with by lowering import tariffs or the abolishment of non-tariff barriers.
"The high amount of illegal levies that businesspeople have to pay when running their activities is the core problem of the economy," he said. "The elimination of corruption and other red- tape practices should, therefore, come first."
Sofyan Wanandi, the chairman of the Gemala Group, said the implementation of the new deregulatory package should be closely monitored so that its measures would meet the government's targets in improving the competitiveness of the country's business activities.
"The government should guarantee that all officials will follow the new ruling's stipulations. Otherwise, the measures will be meaningless," he said. He added that many business measures failed to achieve their targets in the past, because officials in charge often did not fully apply them.
The new deregulatory package includes the simplification of export and investment procedures and the establishment of an anti-dumping committee, in addition to the reduction of import tariffs on nearly 1,500 items.
The package also includes incentives for companies operating in industrial zones and privatization in the management of bonded zones and duty free shops.
Anti-dumping
Aburizal and Sofyan agreed that the most important aspect of the newly issued deregulatory measures is the establishment of the anti-dumping committee.
"That's what businesspeople really need to protect their products on the domestic market," Aburizal said.
Both Aburizal and Sofyan acknowledged that at present, Indonesian businesspeople are helpless to curb the influx of foreign products sold at dumping prices, due to the absence of an anti-dumping body in the country.
Noted economists such as Rizal Ramli, Dorodjatun Kuntjoro- Jakti and Djisman Simandjuntak raised similar views about the new deregulatory measures.
Rizal said that the newly launched measures were far from adequate in addressing macroeconomic problems, such as the widening current account deficit and the unfavorable performance of Indonesia's non-oil exports.
"Measures in the package are inadequate, except those related to the reduction of import tariffs," he said.
Rizal, managing director of a consulting firm, said that improving the country's export performance might be better dealt with through a monetary measure such as speeding up the depreciation of the rupiah against the U.S. dollar.
"A faster depreciation of the rupiah will more effectively boost the competitiveness of our products overseas," he said.
Fiscal incentives, such as the abolishment of sales tax for export-oriented companies, will also produce an immediate impact on the improvement of the competitiveness of Indonesian products, he added.
Dorodjatun, a senior economist at the University of Indonesia, regarded the new deregulatory package as a routine matter, a move which is usually taken ahead of an annual meeting of the Consultative Group on Indonesia, the country's donor consortium.
"But this time, the package is less significant than our expectations," he noted, saying that he was surprised that the new package did not cover service sectors such as airlines, shipping and land transportation.
Like Sofyan and Aburizal, Dorodjatun also said that the most important point in the new deregulatory package is the establishment of the anti-dumping body.
He said, however, that the anti-dumping body should be both extremely qualified and not only include industrial experts, but also skilled lawyers, given the tight procedures in issuing dumping charges to foreign producers.
The anti-dumping committee has minister of Industry and Trade Tunky Ariwibowo as its chairman, and Minister of Finance Mar'ie Muhammad as its vice chairman.
Djisman, a senior economist at the Prasetya Mulya school of management, said that the deregulatory package has yet to address unfair competition in the domestic market and the country's high- cost economy.
"The key factor in revitalizing export activities does not depend mainly on the abolishment of non-tariff barriers, but -- more importantly -- on how we could create fair domestic competition," he said.
He said that the production costs of the local manufacturing companies would remain higher than those of other countries despite the deregulatory package, because problems creating the high-cost economy -- such as low productivity and corruption -- remain rampant.(hen/rid)
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