Businessmen urge cut in red tape

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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