Government urged to ease control of economy

JAKARTA (JP): Prominent economist Dorojatun Kuntjoro-Jakti recommended that the government ease its grip on the economy and share more of the development burden with the private sector.

"The government is getting too involved in the economic development at the expense of other sectors' development," Dorojatun, the dean of the University of Indonesia's School of Economics, said in a seminar over the weekend.

"Sometimes, its intrusions are not fitting at all," he said.

He said that the government is even involved in waste management and the cleaning service business. "The janitors at my school are not civil servants anymore. I gave the job to a private company," he said.

Dorojatun said Indonesia should have a surplus in its national account in order to cushion its entrance into the free trade era. "A balanced account isn't enough. There has to be a surplus in the account," he said.

Indonesia's national account for the 1995/96 fiscal year, ending last March, did not meet previous predictions. The government suffered an account deficit of US$7.9 billion, well over the US$4.05 billion deficit previously estimated by the government.

He acknowledged that one of the reasons why Indonesia's national account is underbalanced was because the government carries too much burden.

"The private sector could help in balancing the budget. It's about time the government stopped being involved in building stadiums, airports and other big projects. Hand them over to the private sector," he said.

Dorojatun also called for a trimmed bureaucracy and greater efficiency. "There are too many inefficient government offices. Their administrations should be computerized and they ought to stop hiring inefficient workers."

Dorojatun also said the government should curb its dependence on foreign investments. "We should increase our domestic savings rate. Our Broad Guideline of State Policies stipulates that foreign investment is only an auxiliary."

According to the World Bank, Indonesia's domestic savings contribute 36 percent of the nation's income.

The seminar, held by the University of Indonesia, was one of a series of events to commemorate the school's 40th anniversary.

Other speakers featured at the seminar included former minister M. Sadli, head of the Association of Private National Banks Trenggono Purwosuprojo, and former Jakarta Stock Exchange director Hasan Zein Machmud.

Trenggono said that many of the deregulations recently introduced by the government to facilitate economic development were not prepared thoroughly.

"The government's deregulations can turn a textile trader into a banker overnight. Furthermore, the government sometimes confuses the private sector. One office says we have to go left, but another tells us to go in the opposite direction," he said.

By the end of the seminar, however, the speakers agreed that Indonesia has shown signs of strength to cope with economic globalization.

"We are late starters, but we have set a fantastic record these past few years," concluded Hasan Zein Machmud. (06)