Sat, 13 Aug 1994

Protection for new ventures defended

JAKARTA (JP): The government yesterday defended its decision to offer selective protection against imports to new industrial ventures.

"The basic protection policy stresses the importance of protecting the new industrial ventures," Coordinating Minister for Economy and Finance Saleh Afiff said here yesterday.

Saleh said this to clarify the tariff protection promised on Thursday by State Minister of Investment/Chairman of the Investment Planning Board (BKPM) Sanyoto Sastrowardoyo for the olefins to be produced by PT Chandra Asri in Serang, West Java.

Sanyoto's promise comes in the wake of the government's June 27 deregulation package, which ruled out any protection for new industrial projects. New projects, according to the measures, should comply with the going rates as stipulated in the Indonesian Import Tariff Book.

Sanyoto said during his visit to Chandra Asri's project on Thursday that the government is committed to protecting its products against imports on the grounds that the project has absorbed large amounts of investment, in addition to its strategic role as a foreign exchange generator.

He estimated that the project, when operational next April, will be able to save some US$1.6 billion per annum in foreign exchange.

"When Chandra Asri is able to compete against imports, the government will terminate the protection facility," he said.

The project, billed as the biggest olefin center in Southeast Asia, is being set up by timber baron Prajogo Pangestu in close cooperation with Bambang Trihatmodjo, one of President Soeharto's sons, Henry Pribadi and Peter Gontha. (fhp)