Cartel-like associations to be scrapped
Cartel-like associations to be scrapped
JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo
said here yesterday that he was ready to dissolve all cartel-like
associations under his ministry as part of the government's
commitment to abolish all monopolistic practices in the country.
The minister said associations like the Association of
Indonesian Forest Concessionaires (APHI) and the Association of
Indonesian Wood Panel Producers (Apkindo) would be allowed to
exist but would no longer be allowed to operate as business
cartels.
"I think we don't need to dissolve the associations if they
have been established, not merely as a price-fixing cartel, but
also as a forum for businesspeople," he said.
President Soeharto announced massive economic reforms
Thursday, which were approved by managing director of the
International Monetary Fund Michel Camdessus, designed to lift
the nation out of its economic predicament.
Under structural reforms, the government will abolish all
restrictive marketing arrangements starting Feb. 1, leaving firms
free to produce and export their products as they wish and as the
market determines. Specifically, cement, paper and plywood
cartels will be dissolved.
Soeharto said the move was aimed at promoting domestic
competition and expanding the scope of the private sector.
The reforms specifically stipulate that "no firm will be
forced to sell its products through a joint marketing
organization (such as Apkindo), nor be required to pay fees or
commissions to it."
Djamaludin said forestry companies originally established
associations and joint-marketing organizations to prevent a price
war between exporters of similar products.
"APHI, Apkindo and other forest-related companies do not just
fix prices and collect fees from members. They also enhance
cooperation between member companies," he said.
However, most association members, notably those of Apkindo,
have long complained about rent-seeking practices as the
association has been dominated by several vested-interest
businesspeople.
"The associations are still waiting for further details of the
reforms regarding their specific parameters," he said.
Djamaludin said the reduction of export taxes on logs, sawn
timber and rattan to a maximum of 10 percent as stipulated in the
reform measures would encourage timber companies to export their
products.
The government currently imposes export taxes on logs and
wood.
He said with the tax reduction, Indonesian logs, sawn timber
and rattan would be more competitive in overseas markets. (gis)