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)