'Government should gradually limit monopolistic practices'

'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)