Vice President Says Hardship Means Business

 
 

Vice President Jusuf Kalla expressed his optimism that the economy in Indonesia would improve in the next two to three years and encouraged entrepreneurs to invest now.

Bandung – Vice President Jusuf Kalla expressed his optimism that the economy in Indonesia would improve in the next two to three years and encouraged entrepreneurs to invest now. “The current conditions are quite difficult and it may continue on like this through next year. However, I am convinced that conditions will show improvement in the next two to three years,” said Kalla in his keynote address at the inauguration of the 7th Indonesian Chamber of Commerce and Industry (Kadin) national congress in Bandung on Monday. Investing during a less favorable time, he added, would be beneficial and dynamic entrepreneurs should see the situation as an opportunity. “Now is the time to invest as everything is cheaper. Building a factory now would definitely be cheaper compared to building in the next two or three years,” said Kalla. The government, continued Kalla, are very supportive of entrepreneurs willing to develop the manufacturing industry as this relates to urbanization, a shift in people from rural to urban areas in search of work. “The manufacturing industry could provide bigger job opportunities,” said Kalla before a crowd of 1,000 Kadin members. Based on Central Statistics Agency (BPS) data, slow economic growth would take place during the initial stage of the Joko “Jokowi” Widodo-Jusuf Kalla administration. BPS released economic growth figures for the second quarter of this year, shown at 4.67 percent, slightly lower when compared to the first quarter figure of 4.7 percent. In the third quarter, the economic growth was recorded at 4.73 percent, a slight increase compared to the second quarter. However, according to BPS, the figure was lower compared to the corresponding period last year, which stood at 4.92 percent. Based on BPS data, the numbers of underprivileged people in Indonesia have increased. In March this year, BPS recorded 28.59 million underprivileged people, 11.22 percent of the entire population. Kadin vice chair Shinta Kamdani said that if the government wished entrepreneurs to invest in the manufacturing industry, they would need to provide incentives. “This could be in the form of tax allowance and tax holiday,” said Shinta.

Since September, the government has released six economic stimulus packages as part of its efforts to revive the economy amid global economic downturn, which include fiscal incentives and the streamlining of licensing procedures for a wide range of industries. Meanwhile, outgoing Kadin chairman Suryo Bambang Sulisto said there needs to be synergy between the business world and the government so as to realize businesspeople’s expectations. The interest rate policy is currently regarded by entrepreneurs as being too high. Suryo cited Bank Indonesia’s interest rate of 7.5 percent as the highest and should be lowered. The government can also help entrepreneurs by not setting high interest rates for banks. “Kadin has proposed for the government to spearhead the move and not to ask for bank interest rates that are too high,” he explained. The 7th Kadin national congress, taking place from Monday to Tuesday, is the highest decision-making forum in the organization, in which participants will pick the chairman for the 2015-2020 period. Two contenders, former trade minister Rachmat Gobel and Kadin vice chairman for banking and financial affairs Rosan P. Roeslani, have expressed an interest in the top post. Both of them will run head-to-head, each looking to obtain a total of 132 votes.

Source: The Jakarta Post, November 24 2015

Investors Advised to Seek Opportunities in Eastern Regions
Friday, 11 December 2015
By : The Jakarta Post - hits : 522

In a bid to help boost development in eastern Indonesia, business groups in the country need to take an active role in encouraging investors to move to eastern parts of the country

In a bid to help boost development in eastern Indonesia, business groups in the country need to take an active role in encouraging investors to move to eastern parts of the country, a senior official has said.

 

Sri Agustina, the Trade Ministry’s director general for domestic trade, said on Thursday business associations could show investors areas in the country which were in dire need of development.

 

“Business associations, under the coordination of Kadin, should not only be able to attract investors to Java or other western parts of Indonesia. They should also nudge investors toward eastern Indonesia,” Sri said, referring to the Indonesian Chamber of Commerce and Industry (Kadin).

 

Due to a lack of development in eastern parts of the country, Sri said, investments would be greatly welcomed particularly if they drove locally based production.

 

The government has plans to provide special incentives for investors who invest in the eastern part of Indonesia in a bid to accelerate economic development.

 

According to data from the Industry Ministry, Java remains the center of industrial development in the country, with industrial investment on the island accounting for 28 percent of the nation’s total investment.

 

The ministry has also forecast that new foreign investments in all industrial sectors will reach Rp 131.4 trillion (US$11.08 billion) next year.

 

Aside from promoting development in eastern Indonesia, Sri said business associations also needed to take part in providing input to any discussions prior to the issuance of government policies.

 

“Input from business associations will make implementation [of policies] a lot easier,” she said, adding that without this input the business community usually viewed government policies as burdensome.

 

Citing an example, Sri said the ministry had initiated focus group discussions with the chamber and several of its member associations on the design of electronic-based trading. “We didn’t just draft the policy, we also discussed it with Kadin and the associations so that we could ensure smooth implementation,” she added.

 

According to her, only around 75,000 out of 50 million small and medium enterprises (SMEs) have taken advantage of the online marketing and distribution channels.

 

“Promotion is required so our products can be recognized beyond the domestic market,” she said.

 

Setio Hartono, the Industry Ministry’s secretary director general for manufacture-based industries, said business associations were involved in the planning of policy design.

 

“Whenever there’s the drafting of policies, we collaborate with associations. They are the bridge between the government and businesses,” Setio said on Thursday.

 

While Kadin focused on the coordination, Setio continued, the ministry would provide a forum to accommodate the demands of producers that normally include exemption of import duties or any other burdens the government can alleviate.

 

“It’s up to Kadin to ensure effective communication, but we’re definitely very close to them,” he added.

 

There are currently around 200 associations registered with Kadin, but there are about 800 more that are not registered.

 

 

Source: The Jakarta Post, 12 September 2014

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