Economic reforms favor small group: Expert
Economic reforms favor small group: Expert
JAKARTA (JP): A large proportion of the government's economic
reforms and regulations benefit only the few people who will gain
most in the long run from the upcoming free market, an
academician says.
Faisal H. Basri, a lecturer at the University of Indonesia's
School of Economics and School of Social and Political Sciences,
said that the small group of private economic players will be
leading the country -- and gaining the most advantages -- when
trade barriers are lifted in the next century.
"Economic policies and regulations are made in favor of, and
to accommodate, this small group, which consists of conglomerate
owners with strong political clout," Faisal said at a seminar on
the investment climate and political change in Indonesia.
Economists Sjahrir and Didiek J. Rachbini spoke at the seminar
organized by the University of Indonesia's School of Social and
Political Sciences.
Faisal said the government should set sound guidelines for the
economic liberalization.
The government's failure to do so has caused it to resort to
solutions which disregard the law, like sequestering funds from
the state budget.
"Now, the government is seeking funds through special fund-
raising schemes," he said, adding that these include the
Presidential Instruction on funds for least-developed villages,
the establishment of the Dua Satu Tiga Puluh company to raise
funds for the manufacturing of the N-2130 aircraft, and
"partnership" programs.
Sjahrir, a lecturer at the University of Indonesia's School of
Economics, noted that foreign investment in Indonesia was still
curbed by a "negative list" of investment sectors and that they
could not wholly own industries which were not export-oriented.
The cost of doing business, he added, was made higher by the
many government offices authorized to issue permits.
"Indonesia's tariff structure is also not neutral and tends to
be more favorable to certain sectors and is a disincentive to
other sectors," Sjahrir said. (pwn)