Liberalize cement trade

Liberalize cement trade

After having become used to hearing reports about scarcities
in cement -- a phenomenon usually accompanied by escalating
prices -- Indonesia is now facing a different kind of cement
problem, in the form of accumulating stocks in a number of
plants. Even President Soeharto found it necessary last week to
instruct the excessive supplies to be exported.

The cement problem continues to grab our attention from time
to time because the price of this commodity has a significant
impact on the national economy. For this reason, the problem
deserves greater attention from the government. This is all the
more true since the general impression has been that it is the
producers (rather than the consumers) who benefit from the
imposed system. Such an impression cannot be simply discarded
because we can all see how easy it is for the government-set
benchmark prices to be violated, and also how easy it is for
producers to set up marketing zones among them.

It would seem that it is necessary for the government to take
steps that go beyond merely improving the zoning concept. This
practice is not in line with the government's policy to
accomplish a healthy economy based on the market mechanism.
Indonesia has committed itself to comply with a variety of
international agreements, all of which aim at liberalizing trade.
Ending zoning in the marketing of cement could help improve the
market structure for this commodity. After the market mechanism
has been well established, the hope is quite considerable that
many local and international investors will be interested in
placing their capital in the cement industry.

-- Bisnis Indonesia, Jakarta