Goro assigned to assist Bulog

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)