Government to help ailing press industry: Hartono

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)