Chairman of Indonesian Businessmen Association (APINDO) : SMALL AND MEDIUM BUSINESS (SMB) SECTOR IS THE MOST TO SUFFER FROM ELECTRICITY PRICE HIKE

The government planned to raise electricity price by 10% in 2012 to increase efficiency of electricity subsidy. Some businessmen consider it a normal thing. But, the government must also give solution to bad infrastructure and incentive given to private sector. Currently, businessmen complain about bas infrastructure which end in traffic congestion and cause high-cost economy. This condition is considered distorting to businesses in the midst of tighter global competition.

General Chairman of Indonesian Businessmen Association (APINDO), Sofjan Wanandi, stated that the plan to raise electricity price in 2012 will have a less profitable effect on businesses, especially small and medium businesses (SMB). Therefore, APINDO will negotiate with the government concerning the electricity price hike plan. National businessmen propose the electricity price hike to not only be applicable to the businesses.

With the increase of electricity price applicable only for the business sector, the businesses will bear the subsidy for 35 millions of low-income people. This is because the government planned not to increase electricity price for the poor, and the businesses must bear the electricity cost of the poor. Sofjan explained that he will negotiate some options, like lower price hike for SMB.? This is important as SMB is the most to suffer from 10% price hike?, Sofjan said.

Sofjan understands if the industries, especially SMB, has objection to the plan. Electricity price hike is not balanced with compensation that could enhance competitiveness. He explained that the mindset of the electricity price hike is so that budget policy could go on more efficient and have an impact on increase of business competitiveness as subsidy could be allocated on infrastructure and public service development. The fact is that after experiencing several times of increase, SMB did not enjoy any compensation, but the burden increases sharply.

Electricity price increase should be balanced with provision of easiness and incentive to the real sector so it moves the economy, and the electricity price increase will be compensated with business volume. He added that so far, the businesses consider that the government has not workd seriously in solving infrastructure problem.

Previously, Minster of Finance, Agus Martowardojo, said that the government will review the plan to raise electricity price. This is done so that it will not burden energy subsidy budget in RAPBN 2012. In RAPBN 2012, the government decreases energy subsidy budget for electricity from Rp.65.6 trillions (APBN-P 2011) to Rp.44.96 trillions (RAPBN 2012). The government also conveys that for electricity subsidy policy for 2012, the government will maintain electricity provision efficiently and will maintain sustainability of interest of electricity provision and consumers.