New deregulation package on the cards

JAKARTA (JP): The government will release a deregulatory package next month to make industry and manufacturing more efficient.

Coordinating Minister for Economy and Finance Saleh Afiff said after voting Thursday that the package would be designed to make the country more competitive.

On when the package would be released, he said: "Some time next month. I can't give you the exact date. Just wait."

He said the package would take several industrial sectors off the country's negative investment list, which includes all sectors closed to foreign investors.

State Minister of Investment Sanyoto Sastrowardoyo said earlier that palm oil plantations might be added to the list.

The daily Bisnis Indonesia quoted a source yesterday as saying that the deregulatory package would also cut wheat subsidies.

Afiff refused to confirm this. He said the deregulation team, which he chaired, had not discussed the cut.

Special facilites

The source said the package would favor some exporters, with the government awarding special facilities to imports of some raw materials.

He said this was expected to improve the efficiency of makers of the country's top 10 products which already receive government assistance.

Finance Minister Mar'ie Muhammad said the government would consistently reduce import tariffs according to a schedule approved by the World Trade Organization (WTO).

"We have committed ourselves to reducing the tariffs. And we're going to do it according to the plan," he said after voting Thursday.

According to the government's May 1995 deregulatory package, import tariffs of up to 15 percent will be reduced to 5 percent or below by 2000. Import tariffs of between 20 percent and 30 percent will be cut to 10 percent or below by 2003.

Mar'ie refused to say whether the government would accept the Minister of Agriculture Sjarifuddin Baharsjah's proposal to raise import tariffs on corn to protect local corn producers.

"What I'm saying is that the government will comply with the schedule of tariff reductions," he said.

Sjarifuddin said that he had made the proposal because local feed producers were not interested in using local corn.

The government, through minister of finance decree No.378/KMK.01/1996, exempts agricultural products from the tariff cuts according to a WTO stipulation.

But the ASEAN Free Trade Area (AFTA) does not include corn in its list of products for which tariff cuts may be delayed. Indonesia has only included sugar and rice on the AFTA list. (bnt)