Dominance of conglomerates must be checked

Dominance of conglomerates must be checked

JAKARTA (JP): Political and business analysts said yesterday
that an anti-monopoly law is the only alternative to limit the
dominance of business conglomerates, which they described as
having reached a critical point.

The analysts, speaking at a seminar on human rights
development, warned that if no legal measure is enforced, the
conglomerates' dominance over the country's economy will not only
widen the financial gap with small economic players but could
destroy the overall economy.

Didin Damanhuri, an economist at the Bogor Institute of
Agriculture, said conglomerates, in the absence of an anti-
monopoly law, would use any loophole to wrangle government
favors.

"They will use any means to influence the government's
economic policies in their efforts to sustain their economic
dominance," he told the seminar held by the Center for
Information and Development Studies, the think thank of the
Association of Indonesian Islamic Intellectuals which is chaired
by State Minister of Research and Technology B.J. Habibie.

Didin said the country's top business groups have, for
example, often used influential think thank and educational
institutions to lobby the government.

Lobbies do not only result in the issuance of privileges but
also protectionist measures, he underlined. He added that such
treatment would further benefit the conglomerates which are
estimated to already control 60 percent of the country's economy.

"That's why, even the coordinating minister was unable to
control the business conglomerates," he remarked, apparently
referring to a recent statement by Coordinating Minister for
Trade and Industry Hartarto.

Hartarto said recently that the government will not restrict
the expansion of conglomerates because their growth is needed to
enable Indonesia to compete in the era of globalization.

Hartarto's remark was made to counter an earlier statement by
State Minister for Investment Sanyoto Sastrowardoyo, who, in a
hearing with the House of Representatives, said that the
government would limit the expansion business groups which
control a market share of 50 percent or more.

Respect

Also speaking at the seminar was outspoken House of
Representatives member Oka Mahendra. He said that conglomerates
have strangely won both favors and respect from the government
even though their actions are often sharply criticized,

"Large business groups are often considered as heroes for
their large tax payments," he said, adding that plain people, on
the contrary, receive no appreciation at all even though they
spend a larger amount of their money to pay property taxes.

The government's biased treatment often occurs in the
construction of new buildings or shopping complexes, he said,
citing that many traditional traders had to give way to the
construction of modern shopping centers.

Oka and Didin shared the view that the country's economic
policies must be reviewed in order to give fair treatment to all
Indonesian business players.

The two economic analysts said that the present economic
policies have deviated from the economic principles stipulated in
the 1945 Constitution.

Oka said the economy, which should be developed for the
interest of all Indonesians, had in fact benefited only those
enjoying close political or family ties with high ranking
officials.

Didin also said that strategic business activities, which
under the Constitution should be controlled by the state, are
being run by politically-connected businesspeople.

He also cited that the country's rich forestry resources have
benefited only certain business groups rather than the
government, while locals live in utter poverty.(hen)