More deregulation measures needed to boost economy

More deregulation measures needed to boost economy

JAKARTA (JP): The government's deregulation measures are not
yet sufficient to boost the economy, a senior economist said
yesterday.

Ali Wardhana, a former finance minister and currently the
government's senior economic advisor, said more deregulation
measures were needed to sustain the country's high economic
growth.

"Despite the progress in establishing sound economic
fundamentals, much remains to be done in achieving solid record
economic growth," he told a business luncheon.

The government has since 1983 introduced several packages of
economic reforms to stimulate economic activities.

But many economists said the government's deregulation
measures did not deal with the country's real issues such as
business inefficiency and red tape. Deregulation has also not yet
touched the monopoly of certain business groups or institutions.

Coordinating Minister for Economy and Finance Saleh Afiff said
last month the government would scrap the monopoly given to the
National Logistics Agency (Bulog) to import certain important
commodities such as sugar and wheat.

"Halfway measures are not enough," said Ali. "If we want to
successfully and speedily address the unfinished deregulation
agenda, especially if we implement measures to deal with
weaknesses in our financial sectors, there is no doubt that
Indonesia will rapidly regain its growth momentum."

He admitted yesterday that Indonesia had created a vibrant
economy which had produced a strong record of growth lifting
millions of people out of poverty.

"Indonesia has spread the benefits of development to many
people," he said.

But he warned the government should not be too quick to boast
about the country's successful economic development.

"The danger is that pride in our development achievements will
create a feeling of complacency and lead us to believe that we
have done all that needs to be done. This is far from correct,"
he said.

He said recent currency market turbulence, for example, should
make the government more aware of the need for further reforms.

"The shock of the currency movements should stir us from any
feeling of overconfidence that may have existed.

"The recent turbulence surrounding the regional currencies
should be a wake-up call for Indonesia," he said.

The country's resident chief of the World Bank Dennis de Tray
also highlighted yesterday the need for Indonesia, along with
other Southeast Asian countries, to continuously reform their
financing system to boost development.

"But in the case of Indonesia, further reforms should not only
be taken in the face of a currency crisis... but also for the
whole economic system," he said.

Dennis said reforms in the financing system and real sectors
should be taken more quickly and transparently to solve current
problems hampering the country's economic development. (aly)