Jakarta gets serious on free trade

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