Government to help ailing press industry: Hartono

JAKARTA (JP): President Soeharto has agreed to help the ailing print media industry, Minister of Information R. Hartono said yesterday.

He did not specify what measures would likely be taken to rescue companies buckling under the pressure of the economic crisis but said he hoped the new policy would prevent members of the press industry from going bankrupt.

"The President has approved my proposal, I hope that it can be implemented as soon as possible," Hartono said after meeting with Soeharto at his private residence on Jl. Cendana, Central Jakarta.

When pressed by journalists to elaborate on the new policy, Hartono responded: "In short, the purpose (of the proposal) is to reduce the burden on the print media (and) prevent more companies from going bankrupt."

In his speech to mark National Press Day on Feb. 9, Soeharto pointed out the media were partly responsible for the current economic turmoil, as it was their reporting that had caused public confidence in the rupiah to deteriorate.

"Now it (the crisis) brings negative impacts on the press which had initially ignited the situation. The press itself is among the first direct victims of the economic crisis, with the very sharp increase in the price of newsprint," the President said then.

The rupiah's free-fall against the U.S. dollar has become a nightmare for the media industry. About 200 of at least 286 publications are reportedly facing bankruptcy.

Leo S. Batubara, the secretary-general of the Association of Indonesian Newspaper Publishers, urged the government last week to exempt the media industry from paying the 10 percent value- added tax.

Indonesia imports 95 percent of the raw materials for newsprint in the form of old newspapers and computer printouts, mostly from the U.S., Japan and Australia.

The five private television stations have also been forced to make adjustments to cope with the sharp decrease in advertising revenue.

All private TV stations must contribute 12.5 percent of their annual advertising revenue to state television TVRI in exchange for an operational license. TVRI is not allowed to air commercials.

Hartono disclosed yesterday that the private TV stations' advertising revenue had dropped by 40 percent since the crisis began last July. The stations also owe TVRI some Rp 40 billion in arrears since 1994.

"He (Soeharto) understands their decision to reduce their air time, and their obligation to (pay) TVRI can be postponed," said Hartono.

The retired Army general also said the press industry was still operating within its boundaries. "So far, I think (the press) is still good, its remains in 'corridors'. I think there's no problem," he said.

The chairman of the Indonesian Pulp and Paper Association, Muhammad Mansur, predicted yesterday that newsprint production would soon be disrupted because Letters of Credits (L/Cs) issued by Indonesian banks for the purchase of materials had been rejected by foreign banks since January.

"Imports of raw materials need (to be processed) for about one or two months, so if our L/Cs were rejected in January it means that procurement in March will be disturbed," Mansur said.

Indonesian newsprint production is about 620,000 tons per year, 430,000 tons of which is produced by PT Aspex Paper, Mansur said. (prb)