Further deregulation in the works

Further deregulation in the works

JAKARTA (JP): The government will announce deregulatory measures on key aspects of the economy later this month in order to encourage competition and improve efficiency, Minister/State Secretary Moerdiono said yesterday.

"The planned deregulatory measures are intended to increase our domestic competitiveness in utilizing the momentum of market globalization," Moerdiono said after a meeting with President Soeharto at the Bina Graha presidential office.

Moerdiono was accompanied by Widjojo Nitisastro, an economic advisor to the government who is a former coordinating minister for economic, financial and industrial affairs and former chairman of the National Development Planning Board.

Key aspects of the economy are generally taken to include domestic and foreign trade, investment, transportation, agriculture, mining and manufacturing. However, neither Moerdiono nor Widjojo provided details of the planned deregulatory measures, with Moerdiono saying only that the measures would be announced this month.

A foreign investment consultant told The Jakarta Post yesterday that a number of observers and businessmen believed the next deregulatory steps were likely to include new policies on agricultural commodities, particularly soybeans and soymeal.

The government's most recent investment deregulation package, issued in June last year, significantly reduced restrictions on foreign investments in various sectors, including, telecommunications, power generation and ports.

That deregulation package, Government Regulation No. 20/1994, also freed foreign investors from minimum capital requirements and effectively ended compulsory divestment requirements.

The World Bank, in a recent seminar on deregulation, said that continued deregulation was crucial if Indonesia was to maintain its rapid economic growth, to raise its competitiveness and to fulfill its commitments under international trade and investment agreements.

At yesterday's press briefing, Moerdiono declined to reply journalists' questions regarding various political issues, such as the East Java provincial administration's decision to ban Megawati Soekarnoputri, who chairs the Indonesian Democratic Party (PDI), from visiting the province.

"The President has recently instructed ministers that they should not make any statements on matters outside their portfolios," he said. (hdj)