DPR wants govt to consult before imposing protection
DPR wants govt to consult before imposing protection
JAKARTA (JP): Members of the House of Representatives (DPR)
have urged the government to consult the legislative body before
imposing any tariff protection policy for industrial ventures to
avoid irregularities or collusion with businesses.
"The parliament has thus far not received any consultation on
protectionist measures from the related ministries," Hamzah Haz,
chairman of the United Development Party's (PPP) faction at DPR,
told reporters after the annual state address of President
Soeharto before the parliament here on Tuesday.
Hamzah said that the House, as a legislative and consultative
forum, has a strategic position not only to weigh up any policy
of the government but also to help provide more legal basis on
policies.
"It is not only a matter of business but also the legality of
policies," he said.
He was optimistic that consultation will create a far-reaching
insight and help clean up policies from irregularities.
Tadjuddin Noer Said, a member of the House's Commission VI,
said that some DPR members, for example, wanted the government to
hold discussions before deciding to protect the olefins to be
produced by PT Chandra Asri's petrochemical project in Serang,
West Java, to avoid any misinterpretation on the policy.
State Minister of Investment/Chairman of the Investment
Coordinating Board Sanyoto Sastrowardoyo said recently that the
government will protect Chandra Asri's products against imports
due to its strategic role in generating foreign exchange.
Coordinating Minister for Economy and Finance Saleh Afiff and
State Minister of National Development Planning/Chairman of the
National Development Planning Board Ginandjar Kartasasmita
defended the tariff protection of Chandra Asri's products on the
grounds that the policy will have a good impact on the operating
of the downstream industries.
Tadjuddin assured that the proposed consultation will help
protect the government from irregularities and collusion with
business people.
Restricted
"I am of strong opinion that the protection policy is so
restricted to the extent of the advancement of conglomerate
owners," he cautioned.
"And you can see that there are so many companies enjoining
tariff protection without limitation of time because their
executives or owners have strong support from government
officials," he said.
"Such protection will not encourage industrial companies to
improve efficiency," he said, adding that such protection will
also make Indonesian products less competitive on the world
market.
Tadjuddin, therefore, suggested that the government establish
a ruling on the protection of industries.
Yahya Nasution, House member of the Indonesian Democratic
Party's (PDI) faction, concurred that deliberating such a ruling
should be a top priority of DPR's agenda in the second long-term
(25-year) development plan. "We hope before the end of the Sixth
Five Year Development Plan (Repelita VI) period in 1999, such a
ruling will have been established," he told The Jakarta Post.
"With such a ruling, the public will be informed on objectives
and effectiveness of tariff protection," he said.
A.A. Baramuli, a member of the House's Budgetary Commission,
said that the proposed ruling should be able to stress the
importance of both upstream and downstream industries.
He was citing the statement of the President before the
parliament, urging all parties to boost the growth of both
downstream and upstream industries in efforts to develop self-
supporting industries in the country.
"We have to strengthen the downstream industries, which so far
have been the mainstay of our exports and they must also be
linked with the intermediate and upstream industries," Soeharto
said in his speech.
Momentous
According to Baramuli, the proposed ruling on protection is
momentous for Indonesia in anticipation of the new era of trade
liberalization to be introduced by the ASEAN Free Trade Agreement
(AFTA) and the General Agreement on Tariffs and Trade (GATT).
"I would say that protection should be imposed only on `quite
strategic' industrial sectors, like the sea transportation
service industry," he said.
He said the government should review its protection given to
the automotive industry.
Unlike Hamzah, Tadjuddin and Baramuli, a member of the
Budgetary Commission, Markus Mangisara Lubis, told the Post that
the proposed ruling on protection is not necessary because
protection is temporary in nature.
"But I would suggest that the government take strict measures
against industrial companies which fail to improve efficiency
after being protected by the government for a certain period of
time," he said.
Lubis said the government should also extend protection not
only to large-scale companies but also to small and medium-scale
businesses, particularly those operating in agriculture and
infrastructure. (fhp/hdj/rid)