No law to bar monopoly and conglomeration here

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)