Govt will not neglect conglomerate: finance minister

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)