Businessmen urge cut in red tape

JAKARTA (JP): Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Aburizal Bakrie said yesterday businesses were hoping the government's upcoming economic reforms would slash red tape and ease licensing procedures.

Aburizal said slashing red tape and easing licensing procedures was urgently needed because Indonesia's economy was burdened by the high costs of doing business.

He was quoted by Antara as saying that deregulatory measures such as these would, in the long run, boost the competitiveness of Indonesia's products on both the domestic and international markets.

Coordinating Minister for Production and Distribution, Hartarto, said yesterday the government would issue the latest package of deregulatory measures next month. He refused to comment further.

The government said last month the new reform package would be launched within this month.

Aburizal and Hartarto spoke to reporters after attending the opening ceremony of the new headquarters of Kadin.

"It is better to wait for an explanation from Coordinating Minister for Economy and Finance Saleh Afiff, who heads the government's deregulation team," he was quoted by Antara as saying.

Saleh said last month the government was planning to release a deregulatory package this month to make industry and manufacturing more efficient and competitive.

Hartarto's statements yesterday imply that the deregulations are not due until next month.

Saleh said recently the package would take several industrial sectors off the country's negative investment list, which includes all sectors closed to foreign investors.

Sources have said the package would favor some exporters, with the government awarding special facilities to imports of some raw materials.

Hartarto said yesterday the government would continue to issue economic reforms to keep Indonesia's growth rate at a steady 7 percent to 8 percent a year and make Indonesia "one of the world's leading economic giants together with Japan, the United States, India, China and Germany by the year 2018".

The government has pledged to consistently reduce import tariffs according to a schedule approved by the World Trade Organization (WTO).

According to the government's May 1996 deregulatory package, import tariffs of up to 15 percent will be reduced to 5 percent or less by 2000. Import tariffs of between 20 percent and 30 percent will be cut to 10 percent or less by 2003.

The World Bank in its most recent annual country report on Indonesia said the government's deregulations had "lost momentum", posing a significant risk to the country's economy.

Other factors which added to this risk were a worsening current account deficit and high core inflation rates.

The World Bank said the deregulation drive had "slowed and even reversed" in some areas. It said there had been slippage in scheduled tariff cuts, while domestic regulations continued to hurt efficiency and inter-island equity.

"About 800 of the announced tariff cuts were not implemented on schedule," the report said. (pwn)

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