Collusion dictates to economy: Scholar

Collusion dictates to economy: Scholar

SURAKARTA, Central Java (JP): Collusion between powerful
conglomerates and the administration is so dominant that it
dictates the direction of the Indonesian economy, an economist
from Gadjah Mada University said yesterday.

"Conglomerates and bureaucrats are the two dominant groups
that determine the fate of our economy," Revriand Baswir said in
a seminar on the national economy held by Sebelas Maret
University on Friday.

The seminar also featured Sritua Arief, an economist from the
Salatiga-based Satya Wacana Christian University.

Baswir, who is the director of the Yogyakarta-based Institute
of Development and Economic Analysis (IDEA), said conglomerates
and bureaucrats play important roles in determining the
production of goods in Indonesia.

"They are also the ones who reap the fruits of national
development," he added.

At the same time the businesses of conglomerates and
bureaucrats are difficult to control, he said.

He noted that 58 percent of Indonesia's Gross Domestic Product
is controlled by about 200 large conglomerates, 24 percent by 182
state-owned enterprises, another 10 percent by middle-scale
businesses, and the remaining eight percent by 36 million small-
scale businesses and cooperatives.

Strong

Baswir said that collusion has made it difficult to
differentiate between conglomerates and bureaucrats.

"The interests of conglomerates and bureaucrats have become
similar. We end up with `Bureaucratic conglomerates' and
`conglomerated bureaucrats'. They are very strong and often
cannot be distinguished," he said.

To change the situation, Baswir proposed the development of an
"economy by and for the people".

Baswir said the concept would be consistent with the goals of
prosperity for the people as stipulated in the 1945 Constitution.

An economy by and for the people would require everyone to pay
attention to the economic condition of the common people, he
added.

Sritua Arief highlighted in his paper the fate of millions of
Indonesian farmers, whom he said have grown more impoverished as
they have integrated with the modern economy.

Sritua said many farmers have become heavily indebted under
the modern economic system. They not only lost possession of
their land, but also ownership of the produce that they helped
plant.

"They have become mere planters," he said.

He noticed that farmers no longer have direct access to
customers, either local or abroad, and their fate is controlled
by middlemen who set the prices of their crops.

This impoverishment push farmers towards even greater
indebtedness, Sritua said. "No wonder they're becoming poorer and
poorer by the day."(har/imn)