Facilitating deregulation

Facilitating deregulation

The government is expected to announce shortly further deregulation measures which, according to Minister/State Secretary Moerdiono, will affect key sectors of the economy. Moerdiono did not say which categories will be deregulated. Observers believe the measure will affect the cement, paper, automotive and retail trade sectors. Obviously, the government's intentions are warmly greeted.

Since the early 1980s deregulation has become a key phase. The government is well aware of the fact that without deregulation the Indonesian economy would become isolated. Indonesian products would not be able to compete because they would be of inferior quality and too expensive.

Indonesia is, at present, one of the countries of East and Southeast Asia which have scored high growth figures in the past decade, due to its sensible economic policies. However, such growth cannot be sustained, much less accelerated, unless daring and consistent deregulation measures are taken by the government.

This warning is implicitly contained in the Asian Development Bank's recent report. According to the bank, the deregulation policies, which Indonesia so daringly followed in the early 1980s, have in the past four years stagnated in both efficacy and daring.

The stagnancy in the deregulation policies, to borrow the bank's term, has lately affected the sector of investment. The Capital Investment Coordinating Board and related ministries, particularly the ministries of industry and trade, appear to lack a common perception regarding deregulation.

Without the courage to improve the licensing system, the forthcoming deregulation measures may not mean very much. As a result we could be left even further behind other ASEAN members.

-- Media Indonesia, Jakarta