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)