Firm measures required

Firm measures required

The problem of cement scarcity and the consequent rise in
prices continues with no clear solution in sight. This newspaper
believes that only President Soeharto, as head of the government
of the Republic of Indonesia, will be able to surmount the
problem of cement scarcity which has caused the price of this
commodity to soar in the past few months. This year's cement
crisis has probably lasted longer than any we have experienced in
the last ten years.

Certain parties have proposed that the level of government
approved standard prices be raised, in effect benefiting cement
producers. Others, however, favor maintaining current prices, a
level that has clearly proven profitable for producers. According
to the manufacturer's own financial calculations, cement
producers are already reporting more than 30 percent in profits,
uncommonly high even for most big businesses.

Cement producers have also proposed abolishing the government
set standard pricing system all together, favoring reliance on
market mechanisms. In light of the fact that one producer already
controls 45 percent of the market in Indonesia, this is no
solution either. Such domination would certainly distort prices,
precluding any possibility of free market fairness.

Given the gravity of the cement scarcity problem this year,
the most promising hope for surmounting the difficulties lies
with President Soeharto. We are confident that if President
Soeharto decides to intervene on behalf of the nation's
interests, the well being of everyone will be secured.

-- Kompas, Jakarta