Monopolies can benefit consumers, says minister

JAKARTA (JP): The concentration of industrial activities from the upstream to downstream levels in a certain group of companies will benefit consumers as long as their operation is efficient, Minister of Industry Tunky Ariwibowo said yesterday.

"Since the consumers get advantages from the efficiency, we have no objection to such monopolistic practices and the government can control the domestic market by importing similar products whenever local prices are very high," Tunky said after speaking at a seminar organized to coincide with the Indonesian Products Expo.

Tunky said his ministry is hosting an inter-ministerial meeting to formulate a decree aimed at restricting industrial expansion.

Coordinating Minister for Industry and Trade Hartarto said earlier this month following a meeting with President Soeharto that large business groups were still allowed to expand their production capacities despite their leading position in the local market.

However, Tunky agreed with State Minister of Research and Technology B.J. Habibie, who told the seminar on Monday that the country needs to restrict monopolistic practices by limiting the expansion of companies already controlling 50 percent of local market shares.

Tunky also said yesterday that big companies can work with smaller businesses to increase the competitiveness of Indonesian products overseas.

Big industrial companies, for example, can encourage smaller firms to supply components for their machinery and engineering plants, he said.

Big companies should also assist smaller businesses in improving management skills and facilitating access to loans, he added. (kod)