No law to bar monopoly and conglomeration here

JAKARTA (JP): The concentration of businesses in certain groups through monopolistic practices and conglomeration continues to happen in Indonesia because there is no law preventing it, economist Kwik Kian Gie said yesterday.

"I almost get bored because I have raised such an issue several times on many different occasions," Kwik told a three-day workshop of the Ministry of Trade.

He pointed out that there are 33 instances of monopolistic practice in Indonesia, including the noodle, palm oil and cement industries. Monopolistic industries are contradictory to the 1945 Constitution.

"Looking at the owners of cement factories and cement distributors, I don't think the motivation behind of management is to serve the public needs but only to enlarge their personal profits," Kwik noted.

He suggested that the government liberalize the cement industry and allow everybody to make cement factories or import cement when needed.

He said the palm oil industry is dominated by only two big conglomerates, Sudono Salim and Eka Tjipta Widjaja, one concentrating on plantations and the other on factories.

Salim, with his Salim Group, also monopolizes the noodle industry, Kwik said.

Kwik also suggested that the government be more careful in protecting or subsidizing local industries as protectionism and subsidies are basically against the General Agreement on Tariffs and Trade (GATT).

"Protection and subsidy for strategic or infant industries are all right," he said. "But protecting the olefins to be produced by PT Chandra Asri is questionable."

Kwik was referring to the government's promised to protect the products of Chandra Asri, the country's first olefin plant controlled by timber tycoon Prajogo Pangestu, by imposing a 20 percent surcharge besides a 20 percent duty on imports of similar products.(rid)