Exports of subsidized goods banned

JAKARTA (JP): A three-week ban goes into effect today on exports of several subsidized commodities to prevent the goods, most of which are imported, from being reexported.

Minister of Trade and Industry Rahardi Ramelan said yesterday the ban was imposed to ensure adequate domestic supply of the commodities and their price stability as there had been a high outflow of the subsidized goods.

The ban covers fish powder, unhusked rice, milled rice, broken rice, wheat, wheat flour, rice flour, soybeans, sugar and kerosene.

It is in effect until Aug. 16, when it will be replaced by an export tax.

"The impact of the monetary crisis has created price disparity in the local and international market, triggering an outflow of goods including products which are subsidized by the government," Rahardi told reporters yesterday.

"Although the export ban is not the correct measure, it must be taken by the government to secure the nation's interests."

Rahardi said commodities already given export taxes, such as crude palm oil and its derivatives, were not included on the export ban list.

On Sunday, the International Monetary Fund (IMF) director for the Asia-Pacific, Hubert Neiss, said the export ban had been agreed to by the IMF.

Neiss said the issue had been discussed and agreed upon by the IMF as a temporary measure to prevent subsidized goods from being exported out of the country.

Rahardi said the taxes to be imposed after the export ban was lifted would be calculated depending on the subsidies allocated to each commodity.

"What we are securing is the money used to subsidize the commodities, so that they won't go outside of the country again."

Rahardi also said the National Logistics Agency (Bulog) would lose its monopoly on the import and distribution of cooking oil and sugar on Jan. 1, 1999.

Bulog's role would be taken over by state cooperatives, he said.

The government has reappointed Bulog to import and process sugar in the country, as well as reinstating its role in distributing cooking oil nationwide, after other measures failed to secure the commodities' supply.

The government ended Bulog's monopoly on the import of most foodstuffs early this year under pressure from the IMF. (das)