RI to open up service sector earlier than planned: Bambang

JAKARTA (JP): Minister of Finance Bambang Subianto said on Thursday the economic crisis necessitated that the country expedite the opening of its service sector, including for accounting firms.

He said full adoption of the World Trade Organization agreement on free trade and service was a crucial part in fixing the shattered economy.

"The earlier plan was to gradually open the service sector until 2020, but unfortunately we have to face quite a heavy crisis in which we have to make restoration efforts," he told a seminar on accounting.

He did not provide the new timetable for the liberalization of the accounting sector.

Foreign accounting and other consulting companies are allowed to operate in Indonesia in cooperation with local partners. The government has yet to forge a commitment with the WTO to open up the service sector.

Bambang said the government hired several foreign accounting companies through their local partners to review the financial condition of commercial banks to gain international trust in the auditing results.

The decision was fiercely criticized by local accounting firms and bankers.

The government had no choice but to turn to foreign accountants because overseas investors were the most likely candidates to buy into the cash-strapped banks, Bambang argued.

"If we used local accountants, will the results be credible in the international financial market? If not, we'll lose one year."

Restructuring the banking sector is an essential key to the country's economic recovery. The foreign accountants are expected to complete the financial due diligence audit on local banks by the end of October.

By the end of this year, all banks are expected to have a capital adequacy ratio of a minimum 4 percent.

Bambang called on the country's service industry including the local accounting firms to improve its professional quality and discipline to compete foreign service providers as the government may no longer adopt past protectionist policy.

"From now on we'll take a market demand policy," he said. (rei)