'Government should gradually limit monopolistic practices'

JAKARTA (JP): The government will have no choice but to gradually limit the monopolistic practices of some business groups in order to comply with its free trade commitment, says Emil Salim, one of Indonesia's most senior economists.

Emil, a former state minister for population and environment affairs, termed monopolistic practices as one of the negative consequences of the government's past economic policies.

The past policies should be corrected to minimize monopolistic practices, he said on Saturday.

The government's past economic policies, Emil said, not only succeeded in sustaining a high level of economic growth but also brought the country in line with middle-income nations.

Despite the success, however, he said the government's past policies erred in creating business monopolies and cartel operations.

"The government possesses extremely strong powers to mend the errors and to gradually end any unfair practices," he said amid renewed debate concerning the monopolistic practices of some of the most influential business groups in the country.

Much discussion has ensued since the State Minister for Investment Sanyoto Sastrowardoyo's recent remark on the government's plan to restrict the expansion of companies with control of more than 50 percent of the domestic market.

Sanyoto later corrected his statement following a criticism from Sudwikatmono, the key executive of the Salim Group which dominates the markets of a number of commodities such as cement and instant noodles.

"A company, even with a market share of above 50 percent, will be still allowed to expand its plant as long as part of its products are exported," he said after a meeting with Sudwikatmono.

Emil said it would be difficult to halt the expansion of conglomerates but estimated that the pressure to minimize monopolistic practices and cartel operations could not be avoided in the future.

He said that the government's commitment to comply with the free trade arrangement under the World Trade Organization and regional cooperation would gradually limit monopolistic and cartel operations.

"If Indonesia, for instance, fails to adopt its free competition commitment in order to protect certain business groups, it will be disputed by others," he said.

Emil also explained that the government's future economic policies should also support small-scale businesses and cooperatives. (hen)