'Populist policies' will continue, says Ginandjar

JAKARTA (JP): Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita said yesterday the government would proceed with its populist economic policy stand to empower the weak.

Ginandjar contended the policy was deliberately pursued to assist small and medium enterprises (SMEs) and cooperatives get a bigger piece of the business pie.

The government will not provide further facilities and protection to conglomerates, he added.

"The populist economic policy will continue, in line with ongoing facilities and protection to small, medium companies and cooperatives," Ginandjar said at a meeting with the Supreme Advisory Board.

Also attending the meeting were Minister of Finance Bambang Subianto, Chairman of the National Development Planning Board Budiono and Bank Indonesia Governor Sjahril Sabirin.

A group of noted economists earlier proclaimed their opposition to the populist policy stance, deriding it as a political calculation to curry popular support.

They warned the policy was economically unsound and leading the nation into bankruptcy.

Minister of Cooperatives, Small and Medium Enterprises Adi Sasono has also backed the populist economic policies, arguing they were the only way to feed the country's growing number of poor.

"People are hungry," Adi said Monday.

Ginandjar said the government efforts to empower SMEs and cooperatives would not be at the expense of major conglomerates.

The government will instead try to create a balanced situation where small enterprises grow rapidly and big companies continue to do business as usual.

A balanced situation will only emerge if the rules of the games are upheld and opportunities are available for all, especially SMEs and cooperatives.

"The most important thing is how to implement it (the populist economic policy) without demonstrating antagonistic gestures to big companies," Ginandjar said.

Facilities which were handed out in abundance to conglomerates under former president Soeharto's administration should be redirected to SMEs and cooperatives now, Ginandjar insisted.

"This is the concept of the future, but there should not be any impression that we are inimical towards big companies. Our country is big enough to harbor all of them," he was quoted by Antara as saying.

The government estimates the economic crisis has caused a four-fold rise in the number of poor in the past year, reaching 80 million now from 22 million in the middle of last year.

It has allocated Rp 55.47 trillion (US$4.27 billion) for subsidies in the 1998/1999 State Budget, up from Rp 12.3 trillion approved earlier in January.

The amount consists of Rp 27.53 trillion of oil and fuel subsidies and Rp 27.95 trillion for other subsidies.

This year's budget deficit is expected to reach 8.5 percent of gross domestic product as the result of the increase in subsidies.

During the meeting, Budiono cited the importance of upholding fair play in the country's economic field, saying the crisis was mainly due to their absence.

"Strong rules of the games should be made to avoid a repetition of the crisis in the future," Budiono said. (jsk)