Regional administrations not prepared for AFTA

Regional administrations not prepared for AFTA

YOGYAKARTA (JP): Regional administrations (regencies,
mayoralties, and provinces), despite their greater authority
under regional autonomy laws remain very much in the dark over
the coming wave of economic liberalization under the ASEAN Free
Trade Area (AFTA) due to kick off next year.

Senior economists Dibyo Prabowo and Mardiasmo, both from
Gadjah Mada University's school of economy, said most regional
administrations were simply not prepared for it.

"Despite their greater authority, regional administrations
know very little about things relating to the free trade area,"
Dibyo Prabowo said in a discussion entitled "Regional Autonomy
and AFTA", organized by the Gadjah Mada University Center for
Asia-Pacific Studies here on Thursday.

Dibyo urged that central government take the initiative by
disseminating the necessary information.

"I doubt the regional administrations are properly informed
about the details of the free trade agreement," he said.

The members of the Association of Southeast Asian Nations
(ASEAN) have agreed to greater trade liberalization in the region
by abolishing restrictive tariff and non-tariff barriers.

Mardiasmo was more radical, suggesting in the discussion that
the central government seek a reason to delay Indonesia's
participation in AFTA.

"Indonesia should tell other ASEAN member countries the real
condition of its economy to convince them that we really are not
ready. I think they would understand," Mardiasmo remarked.

Dibyo however did not agree and warned that delaying its
participation in AFTA could backfire and damage Indonesia's
credibility.

"Gradual participation would be better," Dibyo remarked,
suggesting that the government limit the number of commodities
which could initially be traded under the AFTA arrangement at the
initial stage of its participation.

"Other commodities could be included later," he added.

Both Mardiasmo and Dibyo then lamented the lack of
encouragement and support officials were giving to local small
and medium scale enterprises in preparation for the advent of the
free trade era.

Dibyo criticized regional administrations for focusing too
much on seeking ways to boost their own coffers through various
levies.

With a hint of cynicism Mardiasmo added that local
administrations were busy seeking ways to raise regional income
"while councillors are busy campaigning for a salary raise."(44)