Consumer groups demand abolition of monopolies

Consumer groups demand abolition of monopolies

JAKARTA (JP): Thirty-five consumer groups are calling for the
abolition of monopolistic powers held by companies that control
the supply of people's basic necessities.

In a statement signed on Wednesday, they blamed the monopolies
for the recent hikes in the prices of staple foods and other
basic commodities.

The price increases have left a great number of people
"helpless", according to a statement made available to the press.

The statement was signed by Zumrotin K.S, chairperson of the
Indonesian Consumer Organization (YLKI). Leaders of 34 other
organizations, including YLKI's regional chapters, gave their
endorsement.

"The increase in the prices of cooking oil and flour were the
results of production systems monopolized by private companies,"
it said. "Other basic necessities whose supplies are controlled
by monopolistic and oligopolistic companies are cement and
paper."

The groups demanded that the government launch an all-out
effort to stamp out economic inefficiencies that have contributed
to the rising prices of basic necessities.

They urged the government "to abolish the system of monopoly
and oligopoly by private companies in sectors which concern the
livelihood of a great number of people".

The government should also do away with its protectionism
which causes a high-cost economy and inefficiency, and control
the growing number of business cartels. "The government should
ease restrictions on industries which concern the livelihood of
many people," the statement said.

It called on the government to introduce price controls on
basic necessities as a way of bringing inflation under control.

The inflation rate shot up to 1.6 percent in April, the
highest monthly increase this year, caused largely by increases
in food prices, including cooking oil and sugar.

The consumer price index rose by 4.75 percent between January
and April and it now looks certain that the government will once
again fail to contain the annual inflation rate to below five
percent as it had hoped during the current Five Year Development
Plan. Last year, the inflation rate was 9.24 percent.

The most recent price hikes were sugar, increased by nearly 30
percent, cement by 40 percent and paper, which affects the prices
of newspaper and books, by nearly 30 percent. The increase in the
price of cement was later reduced after strong public opposition.

Many consumer organizations and economic analysts said some of
the increases reflected inefficiencies in their distribution
system and the monopolistic powers of producers and distributors.
(swe)