Indonesia not ready for oopen competition: Expert

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)