Ginandjar hails proposal for more liberal economy

Ginandjar hails proposal for more liberal economy

JAKARTA (JP): State Minister of National Development Planning
Ginandjar Kartasasmita said yesterday that all forms of economic
protection and monopolies should be eliminated and replaced with
an open market mechanism to achieve sound development.

"Development policies should have a clear impact on economic
development, thus efficiency must be continuously improved to
enable us to reach the economic growth target of 7.1 percent a
year during this sixth Five Year Development Plan (Repelita VI)
period," he told reporters during a hearing with Commission X of
the House of Representatives.

Ginandjar was responding to a statement of senior economist
Sumitro Djojohadikusumo, who criticized the country's economy as
being inefficient on Wednesday night.

Sumitro said the inefficiency was mainly caused by the
widespread practice of protectionism and monopolization, which in
turn reduces the amount of capital investment needed to generate
one unit of output, known as the incremental capital output
ratio.

Ginandjar, who said he had not yet read Sumitro's statement in
the mass media, asserted that basically practices of providing
protection and monopolies to businesses were "not the intention
of the government".

To anticipate a more liberal world market, he said, all forms
of protection would be gradually eliminated before the year 2003.
Without such elimination, stable economic growth would be
difficult to achieve.

Ginandjar acknowledged, however, that the current level of
protectionism had not yet burdened the nation's economy, pointing
out that Indonesia's incremental capital output ratio continued
to decline during the Repelita V period, which ended in April
1994.

"Indonesia's incremental capital output ratio during the
Repelita V period was only 3.9, lower than 4.4 estimated by the
plan. This shows that the national economy is becoming
increasingly efficient," he said.

Ginandjar, who is also chairman of the National Development
Planning Board (Bappenas), said his office would make a stricter
selection policy for the projects proposed to his office, with
efficiency being the main requirement to gain approval.

Nuclear

During yesterday's hearing with the commission, which oversees
environmental, science and technology and development planning
affairs, Ginandjar said the plan to use nuclear technology for
power generation could be canceled if necessary.

"I fully agree that there should be a public dialog before
making a decision on whether or not we should use nuclear for
power generation," he said.

"Although the government may have a good argument (to use
nuclear), if there is better reasoning from the people, why not?"
he asked, adding that such a dialog could bring up new ideas and
alternatives.

He said that a public dialog should be conducted while no
decision has been made.

The issue of nuclear technology was raised by legislator
Laksmiari Priyonggo, who questioned the role of the planning
board in a nuclear project.

The plan to construct a nuclear power plant in Central Java
has caused wide debate in the public, with environmentalists
skeptical about its safety.

The government, however, has continued preliminary and
feasibility studies for the project but has yet to conduct safety
surveys.

Ginandjar yesterday acknowledged the importance of nuclear
technology, saying it was the "technology of the future" and that
it was more environmentally-friendly compared to other
technologies.

For Java, he said, the use of coal for power generators was
restricted by a certain tolerable limit.

"But the question of when exactly nuclear technology should be
applied is a different matter which needs thorough studies," he
said. (pwn)