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)