PDI tells govt to first put house in order first

JAKARTA (JP): Indonesia must put its own house in order before endorsing the idea of a free trade zone in the Asia Pacific region, the minority Indonesian Democratic Party (PDI) says.

Economist Kwik Kian Gie, who heads the party's research and development agency, singles out corruption within the bureaucracy as a major obstacle to a healthy and conducive climate which Indonesia needs to establish to reap the benefits of free trade.

Collusion practices between government and business executives must also be stamped out once and for all, Kwik said in a press conference to present the party's stand on the conferences of the Asia-Pacific Economic Cooperation (APEC) forum which opens in Jakarta this week.

APEC, comprising 18 countries, is now considering the idea of establishing a free trade area for the region, possibly by the year 2020 if not before.

Kwik pointed out that corruption and collusion combined make the worst possible economic policies which often tolerate monopolistic business practices. "Some policies were clearly not issued in the interest of the public and reflect the result of strong business lobbying."

Indonesia must improve its economic climate in order to be able to compete with the other countries under an APEC free trade agreement, said Kwik, whose criticisms and controversial remarks on the country's economy in the past often earned the rebuke of the government.

He said the hikes in Indonesian export revenues in recent years are no indications of the country's competitive edge because Indonesian manufacturers essentially remained inefficient. "We can hike exports because we have suppressed workers wages and have continued depreciating the rupiah."

Added value

He said Indonesia's major export commodities include textile, garments, shoes, and wood products, all of which contain very little added value.

"Indonesia would become a tailor and an assembler," he said. "A free trade (within APEC) could mean suppressing workers wages further."

Kwik said Indonesia should not avoid the move to establish free trade within APEC. "We have no choice but to join. If we want to be a respected nation and do not want to become a coolie for other nations, we have to change directions and work hard."

The APEC ministers meeting in Jakarta this Friday will consider a report by the Eminent Persons Group which recommends that the group move to establish free trade by 2020. Malaysia and China, however, have warned against APEC making a firm commitment at the meeting.

Kwik said free trade within APEC will involve certain consequences as well as benefits.

Ideally, free trade must be conducted between countries of equal power, he said."Otherwise, the developing countries will be "eaten" by the more advanced nations." (sim)