High efficiency vital for entering free market

High efficiency vital for entering free market

JAKARTA (JP): Indonesia should reduce its high cost economy so
as to enable its products to enter the free market system within
the APEC member economies, say local economists.

Christianto Wibisono, the director of the PDBI business data
center, said that Indonesia, as part of the world's community,
has to follow the global trade liberalization trend.

In his opinion, the free trade arrangement under the General
Agreement on Tariffs and Trade (GATT) still would have been
implemented according to existing schedules even if APEC had
failed to agree on the free trade commitment.

"We, therefore, have no choice but to follow the trade
liberalization trend," he said in his comment to the free trade
agreement reached Tuesday at the leadership meeting of the 18-
member Asia Pacific Economic Cooperation (APEC) forum in Bogor,
West Java.

At the one day forum, APEC leaders decided to liberalize trade
in the Asia and Pacific rim by no later than 2010 for advanced
member economies and by 2020 for developing members.

"Like it or not, we have to join the free trade pact," he
said.

Christianto said that the signing of the APEC free trade and
investment declaration in Bogor was not only a credit to
Indonesia but also a needed push for the country to appear on the
world's business map.

He warned, however, that the trade liberalization drive should
be followed by improving Indonesia's political openness.

"The trade liberalization should go hand in hand with the
liberalization in the political system," he said. "Otherwise
market distortion will continue damaging the country's business
activities."

Noted economist Kwik Kian Gie said that free market mechanisms
should be introduced immediately by first abolishing protection
and monopolies in a number of the country's economic sectors.

"Red tape and a corrupt mentality on the part of government
officials should also be immediately minimized to create fairer
business practices," he said.

Kwik, also the head of the research and development agency for
the Indonesian Democratic Party (PDI), said that the country's
industrial sector should be further diversified.

EU

Meanwhile, the European Union yesterday welcomed the decision
by the APEC members to create a free trade zone no later than the
year 2020.

Sir Leon Brittan, the commission member with responsibilities
for external economic relations, said in Brussels yesterday that
he was encouraged by the confirmation given during the APEC
meeting in Bogor, Indonesia, of Asia's commitment to continued
trade liberalization.

"So long as APEC reduces barriers in the region without
raising barriers to trade with the rest of the world, this is
good for Europe as well as for APEC," he was quoted by AFP as
saying in a statement.

Brittan said that the APEC states had reaffirmed their
determination to achieve full implementation of the results of
the Uruguay Round of the GATT negotiations.

He said they had also undertaken maximum efforts in each of
their economies to ensure the early ratification of the agreement
that will establish the World Trade Organization and allow it to
be operational from the start of next year.

A systematic and informal dialogue between the EU and APEC
would benefit both sides, he noted.

The German government also praised APEC's pledge yesterday.

"The German government welcomes the fact that APEC nations
have agreed to develop the economic integration of the dynamic
Asia-Pacific region and to intensify the cooperation between APEC
members with the aim of achieving lasting and balanced growth,"
the foreign ministry said in a statement, as quoted by Reuters.

Germany would continue to support stronger cooperation between
the European Union and the Asia-Pacific region, the statement
said. Germany holds the rotating EU presidency until the end of
the year and will be succeeded by France. (hen/fhp)