Minister says bureaucracy major hurdle for exports

Minister says bureaucracy major hurdle for exports

By Riyadi

MEXICO CITY (JP): Minister of Industry and Trade Tunky
Ariwibowo vowed to continue reducing domestic hurdles of exports
to maintain the competitiveness of Indonesia's goods on the
global market.

Tunky said here Thursday that his first priority to boost
exports is to cut and smoothen bureaucratic procedures because
they remain the main hurdle for exports and incur additional
costs to exporters and companies in general.

"We realize that our bureaucracy remains a problem for
exporters, and we have to deal with it because our main
objectives are to boost exports, exports and exports," Tunky told
journalists here.

The minister left Mexico City for Washington D.C. on Thursday,
ending his two-week trade mission to Latin America. During the
mission, Tunky was accompanied by 35 business people from
Indonesia.

Tunky said that a series of deregulation measures taken by the
government since the early 1980s have given Indonesia's economy
the right direction. However, there are a lot of discrepancies in
the implementation of such deregulation measures.

"Our deregulation policy is just right to boost exports.
However, it often encounters problems in its implementation,
especially when there is an interface between government
officials and business people," Tunky said.

Mending domestic problems, the minister continued, is much
more important for Indonesia to undertake because they directly
influence the performance of Indonesia's exports.

"Our deregulation team has been assigned to assess the
problems of implementing deregulation measures in the field. And
based on the assessment, we will be able to take the right
measures to tackle it," he said.

Tunky said earlier that Indonesia's huge protected market
serves as a liability in some cases because leading businesses
are becoming so intoxicated by the protection that they are
reluctant to compete abroad. Therefore, he promised to reduce the
level of protection on the domestic market to force businesses to
compete globally.

As for overseas hurdles for exports, such as tariffs and
nontariff barriers, he added, there are multilateral efforts
being made to reduce them and Indonesia is actively participating
in such efforts.

Complacency

Separately, Chairman of the Indonesian Chamber of Commerce and
Industry Aburizal Bakrie said that the "complacency" attitude
among Indonesia's bureaucrats and business people discourages
them from making improvements in the domestic business
environment.

"This attitude will eventually slowdown exports because the
officials and business people are satisfied with the current
conditions," Aburizal said.

Consequently, he said, they -- especially those who benefit
from the protected domestic market -- will tolerate any ill
practices, such as illicit payments which amount up to 20 percent
of real business costs, less-than-transparent decision-making
processes in government deals, a slowdown in granting licensing
and other factors affecting high cost economy.

Whenever Indonesia can reduce the costs of doing business in
the country, Aburizal said, it will gain more benefits from more
inflows of foreign direct investment and from more exports, which
are increasingly competitive.

"However, if such complacency continues overwhelming officials
and business people, I'm afraid our export performance will not
improve significantly," Aburizal said.

According to Tunky, the growth of Indonesia's nonoil exports
slowed down slightly during the first months of this year,
compared with the same period last year.

Nonoil exports, for example, grew by 13.08 percent to US$18.07
billion during the first semester of this year from $15.98
billion in the same period last year, which represented a 15.23
percent increase over the same period in 1994.

Indonesia began enjoying a surplus in its international nonoil
trade in 1993 with $846.8 million after suffering continuous
deficits from 1989 to 1992.

Indonesia again booked a surplus of $743.7 million in its
nonoil trade in 1994, but again suffered a deficit of $2.76
billion last year. During the first six months of this year,
Indonesia has already suffered a deficit of $1.7 billion in its
nonoil trade.