Export taxes will also be reduced and more sectors will be open to foreign investment. Domestic competition will be further enhanced through deregulation and privatization. Deregulation of domestic markets will be complemented by expanding the role of the private sector in providing infrastructure. The fundamental prerequisite for this strategy is the establishment of a clear framework to guide decision making, to level the playing field for both domestic and foreign investors and thereby assure investor confidence. To these ends, the government has established regulations on government procurement and contracting for which the implementation guidelines will be issued by the end of 1997.
Privatization is another element of the structural reform effort.
Responsibility for the management and restructuring of public enterprises has been shifted from line ministries to the Ministry of Finance, and a new Privatization Board established. A clear framework for the management and privatization of government assets is being developed, which will establish explicit criteria for determining whether an enterprise should be closed, restructured, or privatized. For enterprises remaining in the public sector, the framework will ensure that these operate efficiently, including through establishing profit and performance targets, which will be made public and reported annually. Social Safety Net Maintaining Indonesia's impressive record of poverty reduction over the past 30 years through the provision of basic education, health, and other social services, is an integral part of the government's policy framework. Expenditures in these essential areas will be protected from budget cuts.