Govt urged to pursue greater investment equity

Govt urged to pursue greater investment equity

JAKARTA (JP): Economists want the government to adopt
integrated economic rulings, dismantle barriers of entry in all
business sectors and give more autonomy to local administrations
to create greater equity.

Marzuki Usman, chairman of the Indonesian Economists
Association, told a workshop at the office of the Investment
Coordinating Board here yesterday that such integrated economic
rulings would integrate all economic players, from the largest
businesses to the smallest ones.

"In the future, it will be necessary to establish a legal
system which can create an efficient and perfect-competition
market, thus eliminating the concentration of capital and assets
in the hands of a few individuals or groups," said Marzuki, who
is also chief of the Agency for financial and Monetary Analyses
at the Ministry of Finance.

With such a legal system, he said, all economic players will
have the same opportunity to invest, and investment activities
will be spread more evenly throughout the country.

He noted that investment activities, on the part of both
domestic and foreign investors, have been concentrated in Java
for the past several years.

Of the US$92.38 billion foreign investment approved by the
government from 1967 through 1994, 64 percent was committed for
projects in Java. During the same period, 64.4 percent of the
domestic investment approved was for the same island.

Concurring with Marzuki, State Minister of Investment Sanyoto
Sastrowardoyo acknowledged that business opportunities are still
not exposed evenly among business players.

"Lack of exposure can be witnessed from the increasing
domination of large and medium-scale businesses, compared to
cooperatives and small enterprises," Sanyoto said in a written
keynote address read by his promotion deputy, Sugihono
Kadarisman.

In a related development, chairman of the Indonesian Chamber
of Commerce and Industry Aburizal Bakrie said the arrogance and
monopolistic behavior of large businesses, coupled with redundant
bureaucracy, have created an unfavorable business climate in the
country, especially for small and medium-scale enterprises.

"If the government and the people are really responsible for
nurturing small businesses and cooperatives, it is timely to
create a really clean government," Aburizal was quoted by Antara
as saying in Semarang, Central Java, yesterday.

Barriers

Amid the current trade and investment liberalization
processes, Marzuki suggested that the government dismantle entry
barriers for all businesses to improve the competitiveness of the
country's economy.

A number of factors, which can serve as barriers of entry in
certain businesses, are arduous licensing procedures and
difficulties in access to raw materials, capital resources,
infrastructure and information, Marzuki said.

The control of any raw materials through monopoly, oligopoly
or import regulations, which bar new investors from entering
certain production sectors, need to be abolished gradually, he
said.

To empower small businesses, Marzuki suggested that the
government consider the establishment of a new financial
institution which specializes in giving loans to cooperatives and
small-scale enterprises.

"It is also necessary to create an efficient, non-
discriminative and transparent licensing bureaucracy," Marzuki
added.

To achieve more equal distribution of investment, Marzuki
suggested that the government transfer its licensing authority to
local administrations. (rid)