Unfair practices in RI inefficient: Economist

Unfair practices in RI inefficient: Economist

JAKARTA (JP): Indonesia needs to resolve several problems in
its economy in order to face global trade liberalization
effectively, a prominent economist says.

Djisman S. Simandjuntak, executive director of the Prasetiya
Mulya graduate school of management, said here on Saturday that
Indonesia must make several adjustments in its economy because
ever since its independence in 1945, "it has never really fancied
a market economy".

"But no doubt, a global free market will soon evolve and
capitalism is apparently the direction in which most countries,
including Indonesia, are heading to now," he said.

Djisman was speaking at a discussion on a newly-published
book, Pasar Bebas, Keadilan dan Peran Pemerintah (Free Market,
Justice and Role of Government) written by Dr. A. Sonny Keraf, a
faculty member of the Atma Jaya Catholic University in Jakarta.

The discussion was also attended by speaker Pande Raja
Silalahi, a staff member of the Center for Strategic and
International Studies.

Djisman said that in order to be competitive on the free
market, Indonesia must solve its problems of unfair domestic
competition, rigid price controls, weak social infrastructure and
the slow speed of human capital accumulation.

"Domestic competition in Indonesia implies that the closer you
are to the center of power, the more economically strong you are
likely to be," he said.

On human resources, Djisman said the government should allow
the market, or the private sector, to be more involved in
accumulating human capital. By involving the private sector in
education and training, he said, better human resources can be
more quickly accumulated.

"The future will see a 'brain competition' between nations,"
he said.

Commenting on price control, he said he believed that
Indonesia would be better off without the government interfering
too much.

"I don't know how the government regulates prices here ... but
they definitely play a major role. In a market economy, on the
other hand, prices are created," Djisman said.

The more the government interferes with prices, the more
uncompetitive they become, he said.

Keraf said in his presentation that the government often
intervenes in the "wrong places". "Where no intervention is
needed, (the government) comes in, but when it is needed, it is
not there," he said.

He said that in deciding where and when to intervene, the
government could consider Article 33 of the 1945 State
Constitution.

Article 33 states that: (1) the economy shall be organized as
a common endeavor based upon the principle of the family system;
(2) branches of production which are important for the State and
which affect the lives of the most people shall be controlled by
the State; (3) land and water and the natural riches contained
therein shall be controlled by the state and shall be made of use
for the people. (pwn)

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