RI ready for early sectoral liberalization

RI ready for early sectoral liberalization

JAKARTA (JP): Indonesia is ready to help pursue an agreement
on the liberalization of the nine "fast tract" sectors in the
upcoming leaders meeting of the Asia Pacific Economic Cooperation
(APEC) forum in Kuala Lumpur later this month.

Indonesian Ambassador for APEC Affairs Bintoro Tjokroamidjojo
said here on Tuesday that Indonesia would table a significant
offer at the summit.

The offer, however, will vary from sector to sector. Almost
full access would be suggested for the most ready sectors, like
forest and fish products, while limited-access offers would be
proposed for the least ready sectors like gems and jewelry.

"But across the board, we will have a good offer," he told
journalists at a luncheon hosted by the Indonesia Forum.

The other fast-track sectors are environmental goods and
services, medical equipment and instruments, telecommunications
mutual recognition arrangements (MRA), toys, chemicals and
energy.

The nine sectors are among the 15 APEC leaders earmarked in
Vancouver last year for early voluntary liberalization.

The liberalization of the other six sectors is to be decided
at a later date.

Bintoro said some other countries, especially Japan, appeared
to be backtracking from the fast-track scheme.

He said fish and forestry products remained stumbling blocks.
The two areas are considered politically sensitive in Japan.

Japan has sought support from economies in the region,
including Indonesia, for its refusal to take part in the
liberalization of all the nine sectors.

Bintoro said Japan apparently used its influence, especially
through its latest US$30 billion aid offer, to get support from
the region.

Concerted strategy

Nevertheless, Bintoro predicted that the fast-track early
voluntary sectoral liberalization (EVSL) would not dominate this
year's APEC summit. It would be the crisis in the region and the
issue of antispeculation measures in financial markets that would
steal the show.

Suhadi Mangkusuwondo, a member of APEC's Panel of Independent
Experts, said the organization's leaders should take concrete
steps to reduce the impacts of the crisis and prevent similar
crisis to happen in the future.

He said the Panel had presented a proposal to APEC leaders on
the strategy to halt the downward spiral of the crisis and
provide a foundation for renewed growth.

The centerpiece of the strategy should be a "Concerted Asian
Recovery Program," Suhadi said.

Such a program would consist of domestic expansion though
sizable fiscal and monetary stimuli in virtually every country in
the region, reinforcing and improving the climate for achieving
essential financial and other structural reforms.

Policy shifts by individual countries in the region could
undermine market confidence. But a concerted, regionwide adoption
of the new strategy would effectively counter such concerns. The
parallel nature of any policy shift would minimize the risks and
maximize the prospects for achieving successful results.

"If all the countries reduced their interest rates together,
there would be no risk of destabilizing flows from one country to
another. If they expanded their budget positions in tandem, there
would be little fear of unfavorable investor comparisons," Suhadi
said.

Concerted regional expansion is clearly superior to go-it-
alone efforts, he said. For instance, every 1 percent of
regionwide gross domestic product expansion throughout the
region, including China and Japan, would boost growth by 2
percent in the crisis-hit countries.

And the upcoming APEC summit would be the natural venue to
launch the new strategy, Suhadi said.

M. Sadli, a former cabinet minister and now chairman of the
Indonesia Forum, said that although the upcoming APEC summit
could not produce such a concerted strategy, the summit was still
a prominent venue to take any decision on the future of the
region.

He said national leaders could consult each other on the
direction of their future policies concerning the region.

President B.J. Habibie, for instance, could ask Japanese Prime
Minister Keizo Obuchi on how Indonesia could benefit from Japan's
new credit line of $30 billion, Sadli said.

Habibie could also consult with Chinese leader Jiang Zemin at
the summit on the likelihood of Beijing devaluing the yuan, he
said.

"Therefore, it is of utmost important for our President to
attend that summit."

The government has yet to make an official announcement on
whether Habibie will attend the summit or not. Habibie, however,
said recently he might attend for one day. (rid)