Govt will not neglect conglomerate: finance minister

JAKARTA (JP): Minister of Finance Mar'ie Muhammad pledged here yesterday that the government will not ignore business conglomerates despite its increased emphasis on the development of small- and medium-scale companies.

Speaking at a seminar on the development of small- and medium- sized companies, the finance minister said the government would rather involve large companies in the program than be prejudiced against their massive expansion.

"It is important for me to explain the government's stance so that there will be no misinterpretation," he told around 1,600 owners of small- and medium-scale companies at the seminar.

The government places a higher priority on the development of small-scale companies during the second 25-year development program, which began this month, to further narrow the financial and social gaps between small companies and large companies.

The latter are mostly owned by businessmen of Chinese origin.

Participants at the seminar, sponsored by Nusabank, accused the government of neglecting small- and medium-scale companies during the recently finished 25-year development plan. They also charged that the government's priorities in developing small- and medium-sized businesses in the current long-term development period is only lip-service.

The finance minister dismissed the charge, saying that the program for developing the financially weak companies has been carefully prepared and will be implemented from a long-term perspective.

"The government's plan to narrow the gap between small and big companies is not just an emotional or impulsive reaction to the situation, but a concrete means of improving the social conditions in the country," he said.

Law

The finance minister said a law on small- and medium-sized companies, which is presently being prepared, will be the government's important step in dealing with the social gap between the rich and the poor.

He said the planned law will regulate many areas regarding the incentives and protection given to small- and medium-scale companies, as well as a financing mechanisms and supporting agencies needed to assist them.

Sjahrir, a noted economist and managing director of the Institute for Economic and Financial Research, told the seminar that the government's banking policy for helping these companies has completely failed to achieve its goals of creating equal development.

For example, the requirement imposed on commercial banks to provide at least 20 percent of their total lending to small- and medium-sized firms was not effective, he said.

He added that the requirement imposed on state-owned companies to set aside around one to five percent of their net profits for small businesses did not wok.

The financial gap between small- and medium-sized companies on the one side and conglomerates on the other is now even wider, in spite of the introduction of the financial incentives.

Sjahrir said the government should immediately introduce more concrete and effective measures of dealing with the increasing gap between those of the low-income bracket, or pribumi, the reference to indigenous people, and the wealthy, the reference to the people of Chinese origin.

The delay in introducing concrete and effective measures to assist small- and medium-scale companies could incite social unrest, like the recent riots in Medan, North Sumatra, he warned. (hen)