Jakarta gets serious on free trade

At first glance, the speech this week by Indonesia's President Soeharto on the need for free trade didn't seem like anything out of the ordinary.

In a nutshell, Mr. Soeharto said Indonesia had no choice but to take the free-trade road. "Like it or not, want it or not, prepared or not, the era of free trade will arrive in its own time," he said in a speech at central Java's prestigious Gadjah Mada University.

Cynics have believed that Jakarta's main aim at the APEC meeting was to merely win some political points. They said Mr. Soeharto needed a big "do" to raise his international profile at a time when he needed to show something tangible as concurrent chairman of the Non-Aligned Movement. Many, including some local legislators and business leaders, were also skeptical whether the Indonesian economy was ready for free trade, given the entrenched nature of the pampered and the protected among local industries. But judging from the tone of Mr. Soeharto's statement this week, and the measures that have followed in quick succession, there is clearly genuine conviction in Jakarta on the virtues of the free market.

For a developing country as big as Indonesia, finding faith in open competition after decades of a protectionist bent cannot be a mere mood swing. Mr. Soeharto's statement adds to the evidence that he was the one who made the difference at the Bogor meeting. Had it been the old Indonesia, APEC's hopes for free trade in the region could have fallen flat on its face. Of course, much will now depend on how effectively APEC members carry out the resolutions of the Bogor declaration. This remains to be seen. But if the resolutions come to fruition, as they must, so long as the political will remains firm, credit must go to Mr. Soeharto for being bold enough, at the appropriate time, to change the direction of his country's economy for the benefit of his people. With free trade, the Asia-Pacific will prosper and so will Indonesia.

-- Business Times, Singapore