Cartels and new players

Data shows that a number of subsectors of the domestic economy have come under the control of cartels. The market structure, which they have produced, is such that their impact on inflation is quite significant. We recall how the increase in the inflation rate in the recent past was caused by the soaring prices of cement, whose producers consist of big private industries and state-owned companies.

Any monopolistic or oligopolistic control of the market must be dealt with without delay. The Chairman of the Investment Coordinating Board, Sanyoto Sastrowardoyo, has already made it clear that the government will not grant expansion permits to companies whose products already control 50 percent of the market.

We suggest, in this column, that a conducive climate for investment be nurtured in order to allow new players to enter the scene. The assumption is that having more alternative products will give consumers room to choose. Prices would become more reasonable and the quality of the products would become more competitive.

-- Bisnis Indonesia, Jakarta