'Economic gap could set off instability'

JAKARTA (JP): A prominent South Sulawesi businessman has urged the government to solve the problem of socio-economic disparity because the situation could "explode" and cause mayhem.

M. Jusuf Kalla, a Bukaka Group executive, was quoted by the Kompas daily as saying over the weekend the government must anticipate such developments and create solutions to stop the widening gap between rich and poor.

Jusuf was commenting on an earlier statement by State Minister of National Development Planning Ginandjar Kartasasmita, who said small firms, which made up the most of Indonesia's businesses, contributed to less than half of the country's gross domestic product (GDP).

Quoting the Central Bureau of Statistics' figures for 1994, Ginandjar said 99.8 percent, or 33.4 million of the 33.5 million businesses in Indonesia, were small enterprises with annual turnover of less than Rp 1 billion (US$434,782).

Of the small businesses, 52 percent (17.4 million companies) had annual turnover of less than Rp 1 million a year.

Medium and large enterprises totaled 66.428 that year, making up 0.2 percent of all business.

GDP

Although small businesses accounted for 99.8 percent of all businesses, their contribution to GDP was only 38.9 percent.

Medium and large enterprises, on the other hand, although accounting for only 0.2 percent of all businesses, contributed to61.1 percent of the GDP.

Jusuf suggested the government set a target to narrow the widening economic gap.

"The government could aim to narrow the gap by several percent in 10 years, for example," Jusuf said.

Separately, Director of the Indonesian Business Data Center (PDBI) Christianto Wibisono said that in 1995 the total assets of Indonesia's 300 conglomerates reached Rp 343 trillion, while their sales turnover was Rp 201 trillion.

That year, state firms' total assets reached Rp 312 trillion, while their total sales reached only Rp 94 trillion.

Christianto said it was interesting to note that while the assets of the 300 conglomerates and state firms did not differ much, the sales turnovers of the conglomerates was almost double that of state enterprises.

The data indicates inefficiency in the state firms, he said. (pwn)