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)