Tue, 06 Aug 2002

Experts doubt crisis center able to solve problems

The Jakarta Post, Jakarta

The newly set-up crisis center under the Ministry of Trade and Industry might not be effective in resolving pressing problems faced by businesses here due to its lack of administrative power, experts said.

They argued that the crisis center should have been set up under the Office of the Coordinating Minister for the Economy.

Sri Adiningsih, an economist with the University of Gadjah Mada, said that the problems faced by businesses were very complex and required integrated efforts involving various institutions before they could be resolved.

"This is a big problem. It would be more effective and flexible if the center were led by Dorodjatun Kuntjoro-Jakti as he can easily coordinate with the other relevant departments," Sri told The Jakarta Post, referring to the Coordinating Minister for the Economy.

Minister of Trade and Industry Rini MS Soewandi officially launched the crisis center on Monday.

Its main objective is to help resolve long-standing problems faced by business people in doing business in this country, a move that would also in turn help prevent foreign investors from fleeing the country.

Members of the crisis center will include government officials and business people.

Rini claimed that President Megawati Soekarnoputri had also approved the establishment of the crisis center.

Rini is expected to soon issue a ministerial decree formalizing the center's establishment.

Anton J Supit, chairman of the Indonesian Footwear Association (Aprisindo), who will help run the daily operations of the crisis center, said the immediate focus of the center would be labor conflicts, smuggling and security problems.

"If the crisis center fails to provide solutions, Ibu Rini will bring the problems to the cabinet meeting," Anton told The Post.

Indra Ibrahim, executive director of the Indonesian Textile Association (API), also said that the crisis center would be more effective if it was under Dorodjatun's office.

"But still, we welcome it (the crisis center), because it's better than doing nothing at all," he added.

A source said that Dorodjatun had turned down an initial offer for him to lead the crisis center.

Both local and foreign investors have been facing various problems in the country. The Investment Coordinating Board (BKPM) said that foreign direct investment (FDI) approvals dropped by 42 percent to US$2.5 billion in the first semester of this year compared to the same period last year while domestic investment fell by 70 percent to Rp 11.1 trillion.

Despite the concerns, Sri hailed the move by Rini to set up the crisis center, saying that if successful it would help restore investor confidence in the country, a crucial factor for accelerating the economic recovery process.

"She (Rini) finally wants to take action," Sri said.