Non-tariff barriers obstruct economy: Kadin

Non-tariff barriers obstruct economy: Kadin

JAKARTA (JP): The Indonesian Chamber of Commerce and Industry
(Kadin) has blamed non-tariff barriers, such as monopolistic
practices, as well as various legal and illegal levies as the
major problems hampering the country's economy development.

"We praise the government's latest deregulation policy issued
on Jan. 26, which has reduced import tariffs on 428 items.
However, non-tariff barriers remain untouched," Kadin's chairman,
Aburizal Bakrie, told the press at a fast-breaking gathering here
Tuesday evening.

He said non-tariff barriers, including monopolistic practices,
are of greater importance than tariff barriers, which have been
reduced through a series of deregulatory packages over the last
decade.

Aburizal said that monopolistic trading practices -- such as
those conducted by the National Logistic Agency (Bulog) for wheat
flour, soybeans, sugar and rice trading and by the privately-
controlled Clove Marketing and Bufferstocking Agency (BPPC) for
clove trading -- have an inflationary impact on the economy.

He said such monopolistic practices are ironical because they
are conducted in the era of free trade.

The labeling of bottled beer, pesticides and fertilizer are
also monopolistic in nature, according to Aburizal.

He said any legal levies collected through labeling should be
based on a ruling by the finance minister paid directly to the
state coffers.

Pesticide and beer producers complained recently about the
government and local administration ruling requiring them to
attach hologram stickers or labels on the containers of their
products before they can be sold.

Aburizal said that if Indonesia wants to increase non-oil
exports and to reduce its imports, the government has to cut non-
tariff barriers, which have produced market distortions and
increased costs.

To enhance Kadin's participation in solving the country's
economic problems, Aburizal said the chamber has formed a team to
study recent causes of increased costs, particularly levies.

He said that Kadin's provincial chapters (Kadinda) have also
appointed teams to probe levies which are imposed by local
administrations, while business associations will study matters
which cause the high-cost economy in business sectors.

Aburizal said deregulatory measures alone are not capable of
reducing illegal levies which are mushrooming in the regions.
(kod)