Govt to issue measures to narrow economic gap
Govt to issue measures to narrow economic gap
BANDUNG (JP): The government promised on Saturday to introduce
more measures to narrow gaps between the rich and the poor and to
alleviate absolute poverty.
State Minister of National Development Planning Ginandjar
Kartasasmita told reporters before addressing a meeting with
students of the Bandung Institute of Technology that the measures
will concern macro-economic, monetary, fiscal and investment
affairs.
Ginandjar, who is also chairman of the National Development
Planning Board (Bappenas), made the statement in response to last
week's remarks by senior economist Sumitro Djojohadikusumo on the
widening gap between the rich and poor.
"What Pak Sumitro said has some degrees of correctness and,
therefore, the government does not necessarily deny it as we have
realized that there are gaps -- a gap in income, a gap of
societies in different areas and businesses gaps in different
sectors," Ginandjar said Saturday.
"On monetary policy, we will encourage banks to channel more
credits to small businesses and to companies in less-developed
areas," he said. "Now we still notice that many banks distribute
their funds to a limited number of people and to companies in
certain areas."
The government, in efforts to narrow the gap between the poor
and the rich, has required all commercial banks to channel at
least 20 percent of their credits to small-scale businesses or
cooperatives. It has also assigned all state-owned companies to
set aside up to five percent of their after-tax profits to help
these unlucky group of businesses. President Soeharto has also
called on conglomerates to transfer part of their shares to
cooperatives.
Law
Ginandjar said the government has also long proposed a law to
protect small-scale businesses. "We have long proposed a bill on
the protection of small businesses but until now it has not yet
been passed by the House of Representatives into law. We only
hope that this law will soon be passed."
Ginandjar did not rule out the possibility that the government
will propose an anti-trust law to avoid further monopolistic
practices in the country, which surely endanger the life of small
businesses.
"If it is needed, why not," he said, referring to the proposal
of an anti-trust law.
The minister also suggested that the government review its
fiscal policies which do not distinguish between developed and
less developed areas.
"Although our tax law adopts a progressive system, it is still
not discriminatory, for instance, whether you invest your money
in Jakarta, Maluku or East Timor you have to pay the same rate of
tax," Ginandjar noted.
He said if the government is not quick in bridging the gaps,
they will spread even wider as the pace of growth among the poor
is slower than among the rich.
"So, the gap occurs not because of backwardness of those in
lower income brackets but because of the different pace of
development and growth," Ginandjar said.
He noted that a number of sectors seem to follow this trend.
One of them is the farming sector. "It's because there are so
many people involved in farming. So what we should do now is
transfer these people to other sectors, such as industry or
services."
He said the government will intervene in any sector or area
which seems not to make any progress. "So we have to quicken the
pace of growth of the lower parts. That's how to narrow the
gaps." (rid)