Exporters honored

Exporters honored

It must have been a greatly exhilarating experience for each
of the executives of the 67 companies to receive the Primanyarta
award directly from President Soeharto on Thursday. The award
presentation, held annually, reflects the government's
recognition of the private sector's role as the locomotive of the
country's economic growth. The export recognition award also
serves as the nation's acknowledgement of the crucial role of
exports and consequently the imperative for being competitive in
the international market.

President Soeharto again reminded the business community and
the state bureaucracy of the urgency of further bolstering
exports. He warned that the 17 percent annual growth target for
exports during the 1994-1999 period remained elusive. That is
greatly worrisome as imports increase markedly every year as a
result of the high pace of investments and of the high dependence
of the manufacturing sector on basic and intermediate inputs from
overseas.

What made this year's award presentation much more significant
than the previous ones is President Soeharto's promise that the
best performing exporters will be given additional incentives.
That should be music to the ears of the businessmen. After all,
the businessmen honored have not been working hard to expand
their exports just in the hopes of winning the Primanyarta award.
If the government honors them for their outstanding export
performance, they feel gratitude for the official recognition,
accepting the award as a morale-boosting gesture.

However, all the boon they might derive from the award would
fade away if their companies were again subject to the numerous
hurdles within the export bureaucracy. The export recognition
award would be rendered meaningless every time the businessmen
encountered the harsh reality of an extreme lack of coordination
among the government institutions involved in the numerous links
of the exporting process chain.

The government actually has granted a wide range of incentives
to stimulate exports, including duty and tax exemptions, free
trade zones, credit insurance and export financing, as well as
the preshipment inspection system for imports. However, enacting
incentives is one thing, while administering those incentives is
quite something else. That is the anomaly which often frustrates
businessmen. Officials in charge of administering the incentives
seem to be inordinately suspicious most of the time, assuming
that most businessmen possess inclinations toward crooked
practices. The consequence is arduous red tape and excessively
elaborate documentation, while speed is the name of the game in
the world market.

We wonder why the government has not been able to translate
its political resolve into bureaucratic resolve with regard to
export facilitation. Abolishing the rent-seeking attitude among
many officials and enforcing automatic procedures and transparent
rules would strengthen the integrity of the incentive scheme.

There are numerous cases in which the intended effect of
government incentives has been nullified by abuse and the rent-
seeking mentality on the part of the executing officials. True,
documentation is required to prevent abuse by businessmen with
crooked inclinations but that should not necessarily mean
creating a gridlock in the paperwork flow.

We reckon businessmen do not want a great many additional
incentives. They simply need efficient administrative
arrangements in designing, implementing and maintaining the
appropriate incentives because the fine-tuning of the incentive
system takes place in the day-to-day transactions between
exporting companies and the export bureaucracy. That, we think,
sums up the homework for the Minister of Industry and Trade,
Tunky Ariwibowo, whom we know is the most pro-business minister
in the present cabinet.