Thu, 18 Aug 1994

DPR, economist urge review of policy on greater equity

JAKARTA (JP): A noted economist and members of the House of Representatives (DPR) are urging the government to review its policy on redistribution of income and development of small businesses so that greater social and economic equity can be achieved.

The remarks came in the wake of President Soeharto's State of the Nation speech at the DPR, on Tuesday, the eve of the country's 49th Independence Day. Soeharto said that quadrupling real income and a more equitable distribution of wealth were Indonesia's main targets over the next 25 years.

The President also said the government has targeted an average economic growth rate of over seven percent annually starting this year.

Laksmana Sukardi, the noted economic analyst, told The Jakarta Post that the performance of Indonesia's macro-economy is sound "because the inflation can be controlled and the stable economic growth can be maintained."

"The problem starts when we talk about redistribution of wealth and credit access for small businesses," the former bank executive said.

In his speech, Soeharto said that the role of small-scale industries in the export sector has been "most encouraging". He cited the fact that small-scale industries contributed 10.3 percent of the country's total industrial exports last year.

The President also said that in the last Fifth Five-Year Development Plan (Repelita V) period, exports of industrial goods produced by small businesses grew by an annual average of 22 percent.


Laksmana also expressed agreement with the country's most senior economist, Sumitro Djojohadikusumo, who called for the creation of a government-sponsored investment fund last week to help small and medium-scale businesses compete with bigger firms.

Such measures are required due to the widening social gap, especially in terms of the big companies' grip on business opportunities and the country's assets, Sumitro said.

Laksmana also stated that the country's banking sector is virtually controlled by the big companies.

"The government must stop these monopolistic practices if greater equality is to be achieved and small businesses to develop."

A similar call was also aired by the chairman of the ruling Golkar faction at the DPR, Usman Hasan, who asked for the passing of more laws to regulate the development of small businesses and to achieve a more just economy.

"The government must pass laws on small-scale businesses, stock exchanges and tax revision," Usman was quoted as saying by Antara news agency.

"All of those are needed if the government wants to pursue its objectives in creating a greater equality," he added. (hdj)