Deregulation is inevitable step, Moerdiono says

JAKARTA (JP): Minister/State Secretary Moerdiono defended the decision to open new areas to foreign investment, saying the government had little choice.

Moerdiono told a hearing with the House of Representatives (DPR) yesterday that the deregulation package issued last week was a response to the process of globalization.

"Whether we like it or not, we are part of it," he told the House's Commission II which deals with domestic politics.

The government's latest deregulation package, known as regulation PP20/1994, opened up various sectors that have been previously closed to foreigners because they were considered strategic or vital. These include the seaports, telecommunications, power, railways, civil aviation, nuclear power and the mass media.

Critics of the regulation say the government is selling out the country and runs counter to existing laws.

Moerdiono however stressed that it was unrealistic for people to reject the process of globalization.

The deregulation package has also caused some cabinet government officials to break ranks, prompting accusations that there is poor coordination within the government.

Moerdiono again denied this accusation at the hearing, stressing that all government agencies affected by the ruling were involved in the preparation and were fully briefed.

The latest minister to distance himself from the deregulation package was Minister of Justice Oetojo Oesman, who during a hearing with the House's Commission III on legal affairs on Tuesday said that given the contradictions with existing laws, there would be difficulties in implementing it.

"If the ruling goes against a higher legal item, it cannot be implemented," Oetojo was quoted by Republika as saying.

When reporters asked whether there was no coordination, Oetojo responded "make your own conclusion."

Contradiction

Moerdiono said the ruling does not contradict existing legislation, including the 1967 Law on Foreign Investment. On the contrary, it defines the 1967 law more clearly, he said.

"PP20/1994 ruling fully backs up the law," he said, stressing that it was aimed at giving a more sensible and safer opportunity for foreign investment.

He said Indonesia in the next five years needs no less than Rp 660 trillion ($314 billion) in investment, of which 27 percent is expected from the government and the rest from the private sector, including foreign investors. "The should be efforts to encourage new investment. The package is aimed at that," he said.

Specifically on the concerns that foreign media moguls might be buying into Indonesia's press and broadcasting industries, Moerdiono said this will not happen because the 1982 Press Law which bars foreign investors still stand.

Minister of Information Harmoko, who admitted that he was surprised by the deregulation package when it was first announced, said that he had it from President Soeharto himself that foreigners would not be allowed to own equity in local press and broadcasting companies. (par)