State guidelines aim for fair market

JAKARTA (JP): The People's Consultative Assembly (MPR) proposed on Thursday state policy guidelines which are aimed at creating a market economy, giving no room to monopolistic and corrupt market structures developed during the past 32 years of former president Soeharto's rule.

In its 28-point directive, the draft of the guidelines, which was submitted to the Assembly Working Committee for further deliberation, asserted an economic system which is based on healthy and fair competition.

"The guidelines will work to prevent a monopolistic market structure and various distorted market structures which are detrimental to the people," the draft reads.

The MPR expects to finalize and approve the state policy guidelines before it selects the next president on Oct. 20.

In its introduction, the draft guidelines say that the past corrupt economy has led the country into a devastating crisis.

Critics have said that past economic development programs benefited only a handful of the country's conglomerates and the family of Soeharto. An investigation into corruption which involved Soeharto's charities was terminated on Monday.

The state guidelines say that the new government must avoid multiple interpretation of rulings and policies and be efficient and transparent in the use of foreign loans.

"The (future) borrowing of foreign loans must be approved by the House of Representatives (DPR) and regulated by law," it says.

The state guidelines also rule that foreign loans must be reduced gradually in a bid to gain a healthy state budget with a low deficit.

"This can be achieved by gradually lessening subsidies, increasing taxes in a fair way and by using budget saving measures," the draft says.

Non-governmental organizations have alleged that the Soeharto government corrupted some 30 percent of the country's foreign loans. They demand that the World Bank and other donors provide debt relief of up to 30 percent on grounds that the donors were aware of the leakage but failed to stop it.

The country currently has some US$70 billion in sovereign overseas loans.

Another directive recommends that the new government "renegotiate and accelerate the restructuring of overseas loans with the IMF, World Bank and other donor institutions by considering the ability of the state". The process must be implemented in a transparent way and through consultation with the DPR.

The state guidelines also list priorities for the new government to immediately lift the country out of the protracted economic crisis, through, among other things, price and currency stabilization and the acceleration of bank and corporate restructuring.

The state guidelines also highlight the importance of improving the lives of the poor, particularly those badly hit by the economic crisis.

"Various integrated efforts to accelerate the poverty eradication program and to reduce unemployment are imperative," the draft reads.

It also stresses the need to increase the role of small scale businesses and cooperatives, to protect them from unfair practices and to create a conducive business environment.

The state guidelines also say that the welfare of civil servants and the military must be increased to curb corruption in the bureaucracy.

The state guidelines also mark the importance of a wide- ranging autonomy for provinces, subdistricts and villages in a bid to accelerate regional economic development. (rei)