Goverment wants DPR to stop rift on protectionism
Goverment wants DPR to stop rift on protectionism
JAKARTA (JP): The government, which has been widely criticized
for its protectionist measures for certain industries, assured
yesterday that any future decision on protection will be priorly
deliberated by an inter-ministerial team.
State Minister for Investment Sanyoto Sastrowardoyo said in a
hearing with Commission VI of the House of Representatives (DPR)
yesterday that the team, led by the Minister of Finance, will
discuss the eligibility of protection for certain industries
based on proposals from infant producers.
The minister was criticized soon after he stated that the
olefin project of PT Chandra Asri, a company controlled by the
Bimantara and Barito Pacific groups, will be protected by the
government through the imposition of high tariffs on imports of
olefin products. A number of other cabinet ministers, who were
asked by journalists and businessmen, tried to explain the
government's stance on protectionism.
President Soeharto said last week that the imposition of
protection will be limited for certain industrial plants within a
limited period of time.
Sanyoto, who is also chairman of the Investment Coordinating
Board (BKPM), said yesterday that the government thus far has not
received any proposal from Chandra Asri for the protection of its
products.
"But, please, do not prolong discussions on protection because
such a measure will be arranged by the inter-ministerial team,"
he said.
"The government is willing to give protection but the company
itself has not even sent any proposal asking for protection. So,
why should we make it a controversy?" Sanyoto told reporters
during a break.
Necessity
Sanyoto argued that protection for infant, upstream and
strategic industries is necessary, especially in developing
countries like Indonesia, to protect them from fierce competition
with established companies from developed countries.
"From a macro-economic aspect, protectionism is to help local
products compete with imported products ... which are marketed
here at very competitive prices," Sanyoto contended.
He noted that the long-term goal of protectionism is to rid
Indonesia of dependence on imported products whose raw materials
are available domestically.
In giving protection, Sanyoto said the government will
consider the principles of the General Agreement on Tariffs and
Trade (GATT), of which Indonesia is one of the signatories.
"Article 10 of the GATT allows developing countries to protect
their infant industries," Sanyoto told members of the commission,
which deals with manufacturing, mining and energy industries.
The minister noted that besides infant and upstream
industries, the government also protects industrial activities of
small enterprises and cooperatives.
According to a 1993 presidential decree, the government
protects 37 businesses of small enterprises and cooperatives, six
lines of businesses and eight lines of retail businesses which
are especially given for local entrepreneurs, as well as 20
services.
Among the protected businesses are the industries of salt,
home-produced sugar, hand-made batik, farming tools, poultry,
carpentry tools, taxi services, small ships, television sets,
boarding houses, massage and beauty salons, car rentals,
container services and goods inspection. (rid)