Kwik says time needed to put business in order
JAKARTA (JP): Indonesia still needs a longer period of time to be able to implement a sound business competition policy in an economy long dominated by a handful of powerful conglomerates, according to Coordinating Minister for Economy, Finance and Industry Kwik Kian Gie.
Kwik said on Monday that the essence of a competition policy was still new even to well-educated Indonesians, including economists and businessmen.
"There are many who still question why we have to impose limitations on market shares. So we still need a longer period of time to be able to implement it perfectly," he said after opening a conference on competition policy.
But Kwik stressed that the government strongly believed that effective implementation of a competition policy was vital to the country's economic growth.
Kwik said that the House of Representatives was in the process of selecting members of a new powerful Business Competition Oversight Commission to oversee the implementation of the country's new anti-monopoly law.
"The Commission must perform its functions wisely and transparently. The challenge is to make that this will happen," he said.
"The law cannot cover every aspect because of fast changes occurring in the business world. The interpretations of the law will depend on the commission," he added.
Meanwhile, World Bank country director in Indonesia Mark Baird said that it was important for Indonesia to implement a business competition policy in order to restore investor confidence and revive investment flows.
"This can only be achieved by promoting private sector development through open, flexible, and adaptable competitive markets, encouraging a more sustainable growth pattern that is much less vulnerable to (economic) crisis," he said at the conference.
Baird said that the growth of monopoly and oligopoly power in recent years was a key underlying cause of the country's current economic crisis.
"In the case of Indonesia, their dominance in many instances was supported by government policies and regulations that accord them market power and protect them from competition," he said.
Kwik, however, said that Indonesia wanted to implement the new competition policy in the right way.
"I'm convinced that faulty implementation of our new competition law could set Indonesia's economic reform efforts back. It is important that we do it right," he said.
He pointed out that there was a temptation to see the new competition policy as an opportunity to redress the inequities of the previous industrial structure by granting privileges to those who were once unfairly denied commercial opportunities.
"That would be a mistake. Our competition policy should not seek to redress the wrongs of the past, but to redesign the system so that future industrial and economic growth derives not from undue privileges seized by a business, but from dynamic, efficient and fair competition," he said.(rei)