Experts lament govt policy on poverty eradication

Experts lament govt policy on poverty eradication

JAKARTA (JP): The government lacks the political commitment to
narrow the widening gap between the rich and the poor and to curb
conglomeration in the country's business activities, economists
said at a seminar over the weekend.

Didin Daman Huri, an economist at the Bogor Agricultural
University, said here Saturday that the government's existing
policies to fight poverty and to support the development of the
business activities of small-scale companies remain questionable.

He acknowledged that the government had introduced a number of
financial schemes to help small-scale businesses and cooperatives
and to fight poverty. "But such schemes are not only insufficient
but also ineffective," he said.

Didin told a seminar organized by the alumni of the
Association of Islamic Students that in the past, the
government's economic policies were generally directed toward
encouraging the activities of medium and large-scale companies
mostly owned by businessmen of Chinese descent. Those companies,
for example, faced no difficulties in raising loans from state-
owned banks.

On the contrary, for cooperatives and small-scale companies,
the government's loan facilities were almost "untouchable" not
only due to the small amount of the loans allocated for them but
also due to their inability to meet the requirements of the
banks' bureaucracy, Didin added.

Bank Indonesia, the central bank, issued a number of
"subsidized" loans to stimulate the economic growth in the early
stage of President Soeharto's administration. Cooperatives and
small-scale companies, however, received less than 5 percent of
the credit, while the other 95 percent went to the medium and
large-scale companies.

"The privileges given to those medium and large-scale
companies allowed them to grow rapidly so that they have now
become large conglomerates," he said.

Didin noted that the central bank no longer provides
subsidized credit, but the intimate relationship of those
companies with the government still enables them to obtain more
loans from state-owned companies than small businesses and
cooperatives can get.

Their close relationship with the authorities also enables
them to benefit from almost all of the government's large
projects, he explained.

"This is the main reason why the concentration of business
activities in certain business groups continues." he told the
seminar, which also featured senior economists Hartojo
Wignjowijoto and Eki Syachrudin.

Didin said that the concentration of business activities among
a handful of businessmen could be eliminated only by an anti-
monopoly trust.

"Almost all economists have pointed out the need to introduce
an anti-trust law, but neither government nor the House of
Representatives has touched the issue," he said.

At the seminar attended by over 500 students and former HMI
activists, Hartojo said the wide gap in the country's business
activities not only resulted from the government's failures in
adopting the principle of a market economy and in curbing
corruption, but was also due to the poor quality of the country's
democracy.

"How could you help the poor or small companies if the House
members represent the interests of the authorities," he said.

Eki suggested that the political climate be changed so that
everybody is allowed to criticize the government's policies
openly without any fear. (hen)