Logistics agency gets new boss
Logistics agency gets new boss
JAKARTA (JP): The Indonesian government separated the function of the National Logistics Agency (Bulog) from the office of the state minister of food yesterday amid growing concern over the steep rise food prices, in particular the price of rice.
The separation was effected when Minister/State Secretary Moerdiono promoted Beddu Amang from deputy chief to new chief of Bulog, replacing State Minister for Food Ibrahim Hasan, who had held the post since March, 1993.
"We cannot let the market control the prices of staple foods because there are basic differences between the mission of private institutions, on the one hand, and state institutions, on the other," Moerdiono said, adding that private sector is purely profit-oriented, while Bulog's mandate is to stabilize prices.
He said that Bulog must intervene, whenever the prices of food staples are soaring, by releasing its stocks.
Moerdiono added that food price stability is crucial to curbing the inflation rate.
The government has been greatly concerned over the high inflation rate in recent months, which is mainly due to steep rises in the prices of food commodities, notably rice.
For the month of January alone, the inflation rate was already 1.16 percent.
Bulog was set up in 1967 by the Soeharto administration to manage the distribution of basic food commodities in a bid to maintain food security at reasonable prices.
Owing to its important role, Moerdiono ruled out any suggestion of privatizing Bulog. "I have never thought of privatizing Bulog."
Beddu Amang, who has been in Bulog for over 20 years, noted that the idea of privatizing Bulog had been sparked by public debate about the country's high cost economy.
"The debates have led to the provocative idea of privatizing Bulog or making it a source of profit for the government," Beddu said in a press conference immediately after his installation..
He said those who wanted to privatize Bulog did not really understand Bulog's special role in the country's economy.
The government announced last October that the floor price of husked rice paid by Bulog to village cooperatives was to be increased by 11 percent to Rp 657 per kilogram beginning in January but retail prices have risen much more steeply in recent weeks.
Analysts say that the gap between Bulog's floor price and retail prices should not be higher than 30 percent.
According to the ministry of agriculture, last year's production of unhusked rice was estimated to reach only 46.4 million tons, down by 3.69 percent from 48.18 million tons in 1993.
The decrease in rice production has forced Bulog to import rice and prompted the government to recall, ahead of schedule, its rice loans to several governments, in order to add 900,000 tons to the national stock.
"The last two years were difficult years. We had drought, floods, the problem of distribution, transportation, the diminishing rice stocks and the importation of rice," State Minister of Food Ibrahim Hasan told journalists.
Long time ago
Moerdiono, however, ruled out any notion that the separation between Bulog and the office of the food minister had been prompted by a failure on Ibrahim's part to secure the country's rice self sufficiency.
"President Soeharto planned a long time ago to separate the functions of the two institutions, given their important roles," Moerdiono said.
"The task of the minister of food is so important that he should not be burdened with other duties of equal importance," Moerdiono added.
The government has assigned to Bulog the task of stabilizing the prices of such basic food commodities as rice, sugar, soybean, wheat, corn.
He explained that, after the separation, the office of the state minister of food will be able to focus its attention on policy, while Bulog will concentrate on price stabilization.
Moerdiono defended Bulog's monopoly on certain commodities, provided it is for the purpose of ensuring the stability of basic food prices for the people.
"For macro-economic strategy, Bulog's role is still needed to maintain economic stability because up to now the prices of food staples have weighed heavily among the components of the consumer price index, which is the measure of our inflation," Moerdiono said. (rid)