RI reform running out of stream: Sumitro

RI reform running out of stream: Sumitro

JAKARTA (JP): Indonesia's most senior economist Sumitro
Djojohadikusumo shares the World Bank's concern that economic
reform in the country has lost momentum.

"After 15 years of continuous deregulation, I now sense a
slackening commitment on the part of the government to reform the
economy, while many sectors badly need improvement," Sumitro said
yesterday.

The 1997 World Bank Report on Indonesia draws attention to
what it sees as the slowing pace of deregulation.

"Deregulation has not only lost momentum but has reversed in
some areas," the World Bank asserts, cautioning that there has
been slippage in scheduled tariff cuts and that regulations
continue to hurt efficiency and inter-island equity.

Sumitro told the annual meeting of the Federation of Civil
Servant Cooperatives, of which he is chairman, that many economic
sectors needed reform to expedite the flow of goods, cut business
costs and remove monopolies on certain commodities.

"A stronger political will is needed to abolish the vested
interests (which stand in the way of further deregulation)," said
Sumitro.

Sumitro, who held the cabinet portfolios of trade and research
and technology in the 1970s, said further deregulation was needed
to strengthen Indonesian exporter's competitive edge.

"We need to significantly increase export earnings in view of
our US$103 billion foreign debts and estimated current account
deficit of $9 billion."

The government said a few weeks ago that a new package of
deregulation measures would be launched this month. But it was
officially confirmed Sunday that the package would be announced
next month.

Sumitro praised Indonesia's 7.8 percent economic growth last
year. He said it was quite impressive because it was achieved
without overheating the economy.

"This is the result of prudent monetary management," he was
quoted by Antara as saying.

But he said that the government could lower the inflation rate
further if it had a strong enough political will to cut illegal
levies and abolish collusion between officials and big
businessmen.

"Taking into account the sociopolitical factors in the run up
to the General Assembly of the People's Consultative Assembly
next March (to elect the new president and vice president), I
foresee inflation this year at around 6 percent," Sumitro said.
(vin)