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)