'Market economy only benefits big business'

JAKARTA (JP): Indonesia's market-based economy, without much government control, would widen inequity between small and big business, economist Didik J. Rachbini warned yesterday.

National economic growth relied largely on the performance of big business because of the government's economic policies, he said at a seminar, organized by the Indonesian Democratic Party (PDI) faction at the House of Representatives.

He said the policies benefited big business to ensure high economic growth.

"This means that it will be very difficult for the government to reach its main objective of improving the welfare of common people in the current framework of economic policies," Didik said.

Didik is the chairman of the Institute for Development of Economics and Finance.

He said some senior officials had realized the policy flaws but were powerless to take corrective action. And the House of Representatives had been slow to respond to the government's deregulatory reforms which only benefited certain groups.

"More naively, some of those deregulatory measures were taken because of lobbying by certain interest groups," Didik was quoted by Antara as saying.

If this continues, future deregulatory measures would still be bias toward business groups with powerful political connections, he said.

Medium and small business would still have limited access to economic resources because they would still be controlled by big business in collusion with officials.

"Therefore, deregulatory measures without additional policy efforts will only widen the vast disparity," Didik warned.

He said small business and workers would continue to be sacrificed to boost exports, which had had declining growth in recent years.

Hartoyo Wignyowiyoto agreed that recent deregulatory reforms contradicted with public interest because the reforms aimed to achieve economic targets such as increasing exports and foreign exchange reserves and reducing foreign debt.

He said the domestic economy suffered from weak grassroots support, even though small business had an increasing role to stimulate the economy and raise exports.

He said shareholders enjoyed two thirds of big business' income because they controlled the capital, while one third was consumed by employees, including those on boards of management. Blue collar workers only got a tiny portion.

The government-sanctioned chairman of the Indonesian Democratic Party Soerjadi promised yesterday his party would use input from the seminar to draft the 1998-2003 state guidelines. (rid)