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)