Indonesia not ready for oopen competition: Expert

JAKARTA (JP): Many economic sectors in the country still need government protection, a German expert on monopoly said on Monday.

Wolfgang Kartte, the former president of the German Federal Agency, said here that it would take years for the nation's economy to be made fully open.

"The Indonesian economy is not ready for a completely open market because it could lead to danger for the country," Kartte told a seminar on the antimonopoly bill.

He said many sectors were unprepared to compete against foreign enterprises.

A market economy caters to free pricing, open market and free competition, and it had to have a stable exchange rate, he said.

The Indonesian government would have to continue to regulate prices of certain essential products, especially food commodities, to ensure stable domestic supplies of the products, he said.

The government continues to subsidize rice -- a political tinderbox -- through the State Logistics Agency (Bulog), after phasing out subsidies on other food staples.

The government also needs to limit the flow of imports to support the development of local industries and impose high duties on certain imported products to reduce dependency on imports, he said.

"As a developing country, Indonesia's conditions are still affected by other countries, which make it dependent on imports."

In addition, the state administration had yet to sufficiently monitor market competition, Kartte said.

The state administration in an open market must function efficiently, he said.

There must not be illegitimate government intervention because all the administration activities and measures must be accountable in courts of law, he said.

Graft practices remain rampant because of low earnings of civil servants, he said.

The condition affected competition in the economy, he said, adding that the civil servant salaries must be raised.

Kartte also said the justice system in an open market economy must be independent, providing equal rights to all citizens.

Kartte is leading seven German experts hired by the government to advise on the antimonopoly bill under deliberation in the House of Representatives.

The bill, drafted by a team of 34 House members, is targeted for ratification by the end of the year.

Concentration of the economy in the control of a handful of politically well-connected entrepreneurs is deemed by many as the cause of the fragile economy, assaulted by the prolonged economic turmoil.

Responding to the draft's clause stipulating the establishment of a trade commission to oversee business competitions in the country, Kartte stressed on the need to have an independent team.

"The commission members must be thoroughly clean personalities."

Antimonopoly commission members must also be accountable to the public, which must be given the right to monitor and evaluate the commission, he said. (das)