Major reshuffle at industry ministry

JAKARTA (JP): The government replaced four senior officials at the Ministry of Industry and Trade on Wednesday in an effort to revitalize the ministry to adapt better to new challenges.

Under presidential decree No. 12/2001 issued on Jan. 9, the government replaced Djoko Moeljono, director general for foreign trade affairs; Hamid Machrus, director general for small and midsize industries; Rosediana Suharto, head of the ministry's research and development board; Arifin Lumban Gaol, head of the Commodities Exchange Supervisory Board (Bapebti); and Riyanto B. Yosokumoro, expert staff for marketing.

Riyanto was promoted from marketing to head the director general for foreign trade affairs. Marwoto, formerly director for engineering and machinery, was promoted as the new director general for small and midsize industries.

Manahan Laut Simbolon, formerly secretary of the ministry's research and development board, was promoted as head of the board while Ridwan Kurnaen, previously secretary of Bapebti was appointed as the board's chairman.

Minister for Industry and Trade Luhut Pandjaitan called the reorganization a routine course to adapt to global changes.

"New people come, old people go," Luhut told reporters after the inauguration ceremony.

Djoko has headed the directorate of foreign trade affairs for about 15 years before Riyanto, a senior staff member at the ministry, took over.

According to sources, the government has offered Djoko an ambassadorship. Luhut, however, only confirmed that Djoko did not retire and would have a new post soon.

Ridwan will be in charge of supervising the country's first commodity futures exchange market, the Jakarta Futures Exchange (JFX), which his predecessor, Arifin Lumban Gaol, helped establish in December last year.

Tax review

Meanwhile, Luhut said the government planned to scrap export taxes on crude palm oil (CPO) to boost its competitiveness.

He said it had been agreed by senior officials from the Finance Ministry to abolish the five percent export tax on crude palm oil and its derivatives.

"We hope the change can be put into effect by February first," Luhut said, but added that the plan required the Finance Minister's final approval.

The government has long considered scrapping CPO export taxes to counter declining exports of the commodity.

Indonesia's CPO exports have suffered due to sharp competition from Malaysia, the largest CPO producer in the world.

Luhut expressed confidence that Finance Minister Prijadi Praptosuhardjo would approve the plan, as it related to the country's overall export targets.

"We have to look at the multiplier effects of such a decision," he said, adding that he would call Prijadi to present his proposal.

Prijadi has opposed the idea of abolishing CPO export taxes because of the government's tight budget, and worry that it might drive up local CPO prices.

The government originally imposed the export taxes to prevent a shortage of CPO in local markets. The policy was taken during the sharp depreciation of the rupiah against the U.S dollar.

But Luhut assured that if domestic demands for CPO and its derivatives soared, the government would reinstate the export tax.

The government will also review a recently issued regulation on value added taxes on the sales of luxury goods, according to Rosediana, the former head of the ministry's research and development board.

Rosediana, who according to Luhut will become his expert on taxation and tariffs affairs, said the Finance Ministry issued the new tax regulations without consulting her office.

She said that meetings would be held between the two ministries to review the new tax policy.

It was agreed in earlier meetings between the two ministries to downgrade several products that had been classified as luxury goods, she said.

These products, she added, include, among others, electronic products such as televisions and radios and busses used for public transportation.

Rosediana estimated the government would have completed its review within three months, after which it would consult with the House of Representatives. (bkm)