PDI attacks new deregulatory measures as unconstitutional

JAKARTA (JP): The Indonesian Democratic Party (PDI) yesterday attacked the government's newest economic deregulation package, which opens the door wide to foreign investors, as violating the spirit of the 1945 Constitution.

PDI's Central Executive Board in a statement yesterday called on the government to reverse its decision and promised that its faction in the House of Representatives, despite its minority position, will fight to repeal the PP20/1994 regulation.

"We feel that the intention and the spirit of Article 33 of the 1945 Constitution obliges the state to control all branches of production that are vital to the state and affect the livelihood of many people.

"The PP20/1994 uses this formulation but turned its meaning around, that is allowing foreign companies to take control as long as Indonesia has a five percent equity," said the statement, jointly signed by Deputy Chairman Kwik Kian Gie and Secretary General Alexander Litaay.

The PP20/1994 allows foreigners into sectors which have until now been jealously guarded by the government on the grounds that they are considered strategic.

These sectors include ports, power generation, telecommunications, sea transportation, education, aviation, water supply, railways, nuclear power and the mass media.

The regulation has raised questions on the constitutionality of PP20/1994 which many found to contradict existing legislation. The mass media, for example, is regulated by the 1982 Press Law which clearly bars foreigners from owning any share in the country's press and broadcasting industry.

Contradictions

PDI also found contradictions between PP20/1994 and the 1967 Law on Foreign Investment and the 1968 Law on Domestic Investment.

PDI, the smallest of the three political organizations in Indonesia, includes factions from the remnants of the now defunct Indonesian Nationalist Party (PNI).

President Soeharto in the past two weeks has defended the government's stand of allowing big corporations to run some of the country's giant industrial projects as monopolies, saying that their financial and management muscle is needed to handle such major ventures.

Soeharto said Article 33 of the Constitution states that the government should control vital branches of production but makes no mention of ownership. He also gave assurances that the government has ways of controlling big corporations.

The PDI statement declared that the government is now stretching that argument further to justify the entrance of foreign companies into these same strategic sectors.

There must be proper guidelines to distinguish "control" and "ownership", it argued. (emb)