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)