Exports of subsidized goods banned

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)