Local retailers say keep ban

Local retailers say keep ban

JAKARTA (JP): The newly established Association of Indonesian
Retailers appealed yesterday to the government that it maintain
the restriction on foreign investment in domestic retail
businesses.

The association's chairman, E. Dachlan, said yesterday that
the country's retail industry should be closed to foreign
investments to protect local companies.

Speaking at a hearing with the Trade and Monetary Commission
of the House of Representatives, Dachlan said medium and large
scale retailers are still unable to compete with foreign rivals,
which are not only stronger in terms of capital but also in
technology.

Despite the ban, foreign retailers are able to operate in the
country by exploiting legal loopholes, such as by being engaged
in franchising operations with local partners. Some of them use
technical cooperation to cover up their Indonesian operation.

The operation of such big names as Japan's Sogo, Yaohan and
Saebu as well as Metro of Singapore in the capital's most
strategic areas indicates how ineffective the Indonesian
regulation is.

Other big names in the world's retail industry, such as K-Mart
of the United States, will also follow suit and tap into the
growing local retail industry.

An executive of the association said the mushrooming of
foreign retailers has resulted from the government's obscure
ruling.

Anton Lukmanto, the association's deputy chairman for
supermarket operations, said that the government's regulations
for retail activities were often misinterpreted due to the lack
of clear guidelines.

He did not directly criticize the banning of foreign retailers
but said that the existing ruling did not fully protect the
interests of local retailers.

"What we want is a clear-cut ruling so that we can be secure
in conducting business," he said at the hearing.

The association was established last December as a
professional organization grouping retail companies, including
those involved in the sale of construction materials.(hen)