Poverty is chiefly government's problem: Sofyan

JAKARTA (JP): The government's decision to hold a quarterly cabinet meeting to discuss poverty eradication is a timely recognition that poverty is chiefly the problem of the government and not the business community, businessman Sofyan Wanandi says.

"All this time, large entrepreneurs have been made the scapegoat for the huge disparity between the rich and the poor," Sofyan, chairman of the widely diversified Gemala business group, told The Jakarta Post yesterday.

He was commenting on Tuesday's cabinet meeting led by President Soeharto.

The meeting, which lasted for four and half hours without a lunch break, focused solely on the government's efforts to eradicate poverty and promoting greater income equality.

The government estimated that 25.9 million, or 14 percent of Indonesia's 200 million population, live below the poverty line.

The meeting heard the report of nine cabinet ministers on the implementation of the government's anti-poverty programs. Besides helping to lift those below the poverty line, the programs include promoting small and medium enterprises.

The government plans to hold the meeting every three months.

"Poverty is, first and foremost, the problem and the responsibility of the government. We, the large corporations will support the efforts," said Sofyan, who is also the chief spokesman for the Jimbaran Group of conglomerates.

He said by holding the meeting regularly, the government has taken the main focus of national development to the poverty problem, something that has never been done in the history of the New Order government.

"This is a good start," he said, adding that hopefully, there would be even better coordination among government agencies in the anti-poverty drive.

Separately, the Indonesian Chamber of Commerce and Industry welcomed the decision which it said reflect the government's "political will" to eradicate poverty and promote equality.

The chamber, in a short statement, said it is hopeful that the government's objectives would now be achieved in a short time.

Sofyan said that conglomerates have been willing to assist in the government's endeavor, but they cannot be expected to carry the entire burden of guiding the small enterprises.

"Our chief role is not to guide the small enterprises. Our chief role in development is in providing jobs, earning foreign exchanges and pay taxes," he said.

Soeharto has repeatedly turned to giant conglomerates to help in poverty eradication drive. Last year he decreed that individuals and corporations whose after-tax annual income exceeds Rp 100 million must pay an additional 2 percent towards a new anti-poverty fund.

Previously Soeharto had also required conglomerates to give up 2 percent of equity in their companies to cooperatives. Conglomerates are also encouraged to enter into partnerships with cooperatives, small and medium enterprises.

Sofyan admitted that the various programs were "burdens" to the conglomerates in the short run because they cut into their profits and possibly even their competitive edge. "But what can we do? The political pressure is so strong. If we don't comply, we'd be in trouble."

The President has often reminded the big conglomerates that they owed their successes to the New Order government and that it was only right if now they paid back to society.

Sofyan is hopeful that the conglomerates will only have to subsidize the small enterprises for between two to five years before they can stand on their own feet.

"We will then reap the benefits because these small and medium enterprises will eventually give us something back.

"It's a win-win situation," he said. "But initially, it is a political cost. There is no other way."

Tuesday's meeting agreed that contracts for government procurements will only be given to small and medium enterprises. Another decision was that big conglomerates cannot operate supermarkets at regency towns and below. The sector is reserved only for small and medium enterprises.

In the past, procurement projects were awarded to large corporations, and they in turn were expected to parcel them out to small enterprises, although this rarely happened, Sofyan said.

"With the new policy, the small enterprises get the first priority and if they cannot do it, then they would invite the `biggies'," he said.

He welcomed the ruling on supermarket operations. "We will have to find shops, upgrade them, and work in partnerships. They will profit and we will be able to sell even more."

Sofyan cautioned that the various government programs for poverty eradication and promotion of greater equality have encountered problems in their implementations in the field.

"The problem is in the implementation," he said, adding that "this has always been our weakness."

He hoped that at the quarterly cabinet meeting on poverty, these problems would be raised, and eventually dealt with.

Asked about criticisms doubting the conglomerates' commitment to eradicating poverty, Sofyan said members of the Jimbaran group have done more than their share in these endeavors, such as allocating shares to cooperatives and in contributing 2 percent of their after tax incomes towards the anti-poverty fund.

But there were conglomerates outside the Jimbaran group who did not participate because they did not feel the obligation. "That's why we urged the government to make them compulsory," he said. (05/emb)