RI told to tackle problems outside WTO
RI told to tackle problems outside WTO
JAKARTA (JP): Indonesia must address its investment,
competition and environmental problems despite rejecting their
inclusion on the agenda of the coming Word Trade Organization
(WTO) meeting, experts said yesterday.
Hasan Kartadjoemena, Indonesia's former ambassador to the
General Agreement on Tariffs and Trade (WTO's predecessor),
warned yesterday that sooner or later these contentious issues
would make their way into WTO negotiations.
"Indonesia should address these issues domestically because
they will eventually end up on the WTO table as most major
trading countries will continue to push these issues forward,"
Kartadjoemena told a seminar hosted by the Indonesian Forum.
The government has repeatedly said it would block efforts to
raise human and labor rights, investment, competition policy,
government procurement and other contentious issues at the first
WTO ministerial conference in Singapore next week.
Kartadjoemena commended the government's persistent rejection
of efforts to link trade and non-trade issues because Indonesia
was not ready to face the link.
"However, in the context of our domestic policy, we must
address them... especially because our economic structure is so
oligopolistic," Kartadjoemena said.
He said the government must encourage domestic competition to
overcome monopolies and oligopolies.
The government must also empower small and medium-size
enterprises to help drive the economy and exports, he added.
"The fact is that most large businesses here are not exporters
because they mainly play in heavily protected domestic markets,"
Kartadjoemena said.
Businessman Iman Taufik, an executive of the Indonesian
Chamber of Commerce and Industry, agreed yesterday saying that
most local businesses were not ready to face free trade.
Iman said investment liberalization would hurt local business
while benefiting foreign firms because they would be free to
enter all industries.
"Just look at the electricity sector, which has been opened to
foreign investment. The state electricity firm PT PLN has to bear
higher costs because it is required to buy electricity from
private generators," Iman said.
He warned the multilateral investment agreement proposed by
the European Union could encroach on the country's economic
sovereignty because the government's authority to regulate
investment would be severely limited.
If this treaty is adopted by the WTO, it would be
automatically legally binding, requiring member countries to make
their national policies according to the treaty.
"Once it enters the WTO, it will be difficult to change
because amending a WTO agreement requires the approval of two
thirds or three quarters of the membership and also major trading
countries," Iman said.
He said Indonesia should stick to its guns on investment
policy because, once it was regulated by the WTO, stronger
country's might have a mechanism to economically colonize weaker
ones.
"Therefore investment promotion is a priority, while
liberalization must be done through a proper process," Iman said.
(rid)