Experts call for govt intervention to realize ideals

JAKARTA (JP): The undertaking to establish a more democratic economy calls for more government intervention in guaranteeing a fairer distribution of income, assets and access for all, a seminar concluded yesterday.

Speakers at a seminar held by the National Resilience Institute (Lemhannas) agreed the 1945 Constitution set the platform for realizing the ideals of a democratic economic system.

Dorodjatun Kuntjoro-Jakti, dean of the School of Economics of University of Indonesia, said a set of world-wide acclaimed instruments would be helpful in transforming the ideals into daily behaviors.

"Fairer distribution of income, assets and opportunities or access should be applied in a nation searching for a democratic economic system, regardless its historical or cultural background," Dorodjatun said.

He said the government's fiscal and tax policies, which included progressive and after-sales taxes, have become taken-for-granted instruments for making a fair distribution of income.

As for the distribution of assets, Dorodjatun suggested a transfer of wealth by imposing taxes on people who were lucky enough to inherit belongings. Japan, for example, stipulates that 40 percent of the value of an inheritance goes into the government's coffers, Dorodjatun said.

Access deals more with having the opportunity to get a job and run a business, which Dorodjatun characterized as the absence of trusts and discriminative treatment in career promotion.

A good example, Dorodjatun said, was the US$700,000 fine recently imposed on an American bank for denying its colored employees promotion to managerial level.

"We do nothing wrong if we learn from foreign patterns, even the American liberal capitalism which is a considered villain in the light of (state ideology) Pancasila," Dorodjatun said.

"Americans at least are consistent in fulfilling promises stated in their economic idealism," he said.

Dorodjatun warned that failure to transform idealism into behavior would lead Indonesia into a crisis of credibility while it was bracing itself for a free market in the 21st century.

"I'm afraid that from an historical point of view Indonesia will be outmaneuvered by its competitors when a global market comes into effect," he said.

To prevent such a thing from happening, Dorodjatun urged drastic changes to development strategies.

"We have let corruption go on for such a long time, and ended up with a corrupt society," he said. "Hence the next five-year national development program must lead to a new civilization eager to establish innovation in management, organization and marketing network."

Inequality

Deputy Governor of Lemhannas Juwono Sudarsono supported Dorodjatun's views, although he said he believed a democratic economy did not necessarily mean everybody must have equal income, assets and access.

"Individuals are different by nature, but the government must help those who are unlucky improve their capabilities," Juwono said.

"The government can reach the unlucky through policies which guarantee equal pre-conditions for business competition," he added.

He suggested an adjustment to the principles guiding cooperatives, which are Indonesia's economic foundation, to the current international economic structure.

"The ideals of a cooperative will remain poetic verses if we do not try to conform them with the world's market-oriented economy," he said.

Earlier in the day, Minister of Defense and Security Edi Sudrajat said in his keynote speech that different capabilities could bring about a wide gap between national companies.

"But it's obvious that to some extent the imbalance of growth from one company to another originates from unfair competition, such as discrimination in bids, facilities to complete licenses and collusion," Edi said.

He said legislation on ethics was needed to avoid the violations of a competitive economy such as monopoly, oligopoly and conglomeration, affecting a democratic economy.

Minister of Agriculture Syarifuddin Baharsyah and Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya also presented papers yesterday. (amd)