New reform measures expected next week
New reform measures expected next week
JAKARTA (JP): The government will announce next week, after
several delays, a new economic reform package aimed at boosting
economic efficiency.
State Secretary Moerdiono said yesterday, after meeting with
President Soeharto, that the President had approved in principle
the deregulation package proposed by ministers but "there are
things that still need fine tuning".
He was accompanied by Coordinating Minister for Economy and
Finance Saleh Afiff, Coordinating Minister for Production and
Distribution Hartarto, Minister of Industry and Trade Tunky
Ariwibowo, Minister of Finance Mar'ie Muhammad and Bank Indonesia
Governor Soedradjad Djiwandono.
Moerdiono did not say what day next week the deregulations
would be announced but Coordinating Minister for Production and
Distribution Hartarto said it would be on Monday.
"There are things that still have to be considered ... views
and policies outlined by the President that we must re-elaborate,
and this will take time," he said.
"Hopefully we can announce (the deregulations) next week," he
said.
Moerdiono said the reforms would increase economic efficiency,
boost Indonesia's competitiveness, slash unnecessary levies and
boost the domestic economy, particularly that of small and medium
businesses.
He said the deregulations were final and the delay was caused
by "administrative reasons".
Earlier, finance ministry officials said the package had been
finalized and was likely to be announced after yesterday's
meeting.
The deregulation measures were previously scheduled to come
out last month but Coordinating Minister for Economics and
Finance Saleh Afiff reportedly said on June 20 there were some
differences of opinion among ministers involved in drawing up the
proposals.
On June 25, Moerdiono said the package was at the final stage,
indicating the differences were resolved.
The World Bank in its latest report on Indonesia says that
Indonesia's deregulation program is losing momentum and that this
could affect the health of the economy.
Economist Faisal Basri said deregulation packages would not be
effective if they only aimed at removing import tariffs.
"Deregulations will become less and less effective unless they
manage to improve the market structure and increase corporate
efficiency," said Faisal, head of the department of economic
development studies at University of Indonesia's School of
Economics.
Faisal was quoted by Antara as saying that deregulations which
only aimed at slashing import tariffs were "very dangerous"
because they did not touch on the root of the problem, which was
the high cost of doing business here.
"Deregulations imply that prices will go down, but what will
happen if costs don't go down as well? " Faisal said.
Businessman Aburizal Bakrie agreed, arguing yesterday that
deregulation was essential but "not enough", especially if it was
aimed at only reducing import tariffs.
He said it was equally important to deregulate licensing
procedures to reduce the high cost of doing business in
Indonesia.
Antara quoted several sources as saying that the up-coming
economic reforms would streamline investment procedures and
deregulate several industrial sectors, except the automotive and
petrochemical industries. (pwn)