Goro assigned to assist Bulog

JAKARTA (JP): Despite the campaign against crony capitalism, the government has assigned a private company partly owned by Hutomo Mandala Putra to assist the State Logistics Agency (Bulog) distribute basic commodities nationwide.

Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaja said Monday PT Goro Batara Sakti would distribute basic necessities such as soap and toothpaste, while Bulog would continue to manage food staples, especially rice.

"As you know, Goro is also partly owned by cooperatives and Goro operations will help both cooperatives and small businesses to grow," Subiakto said after meeting with President Soeharto at the Bina Graha presidential office.

The wholesaler firm is 45 percent owned by Hutomo, the President's youngest son -- popularly known as Tommy -- through his Humpuss business group, 15 percent by Bulog and 45 percent by cooperatives.

Goro now has two outlets in Pasar Minggu, South Jakarta, and in Kelapa Gading, North Jakarta. The Goro wholesale outlet at Kelapa Gading was built on a plot of land formerly owned by Bulog.

In October 1996, Goro swapped 75 hectares of land it owned in the Marunda area near Tanjung Priok for 50 hectares of developed land owned by Bulog in the Kelapa Gading area.

Subiakto offered assurances Monday that Goro would not use Bulog's facilities in Jakarta or in the provinces. However, the two parties would cooperate closely to help small enterprises.

Goro buys commodities directly from factories and sells them to cooperatives and retailers at wholesale prices.

"They will offer cheaper prices because they buy merchandise in bulk directly from factories," the minister said.

The President has instructed that low-interest credits be given to cooperatives to enable them to compete with big companies, Subiakto said.

"As we have previously announced, we have allocated Rp 2.2 trillion for this concessional loan program," he said, adding that the interest rate would be about 17 percent annually.

The Ministry of Industry and Trade issued a decree last October restricting the operations of big retailers outside provincial cities in a bid to give small shops and cooperatives a greater opportunity to develop.

Big retail companies however are allowed to operate in regency towns with very high economic growth on the condition that they help develop traditional markets and small cooperatives through partnership schemes.

But the Jan. 15 reform package agreed with the International Monetary Fund (IMF) requires the government to allow foreign retailers to operate in the country. (prb)