GOVERNMENT SHOULD REALIZE COMMITMENT TO GIVE INCENTIVE TO BUSINESSES

          Businesses are happy with government’s plan to give incentive to businesses who will invest in infrastructure to businesses who will invest in infrastructure project. Infrastructure construction is expected to enhance Indonesia’s economic growth. Infrastructure enhancement is also in the framework of anticipating possible decline in Indonesia’s export, and to increase domestic trade. Incentive is given to state-owned and private investors. State-owned investors, for example, should improve their performances due to low return on investment.

              But, the above plan receives lack of response from businesses. Chairman of Indonesian businessmen Association (APINDO), Sofjan Wanandi, reminded the governments to not only give unrealized promises. According to Sofjan, incentive alone is not enough. The incentive concept must be clear and reach the target beneficiary so it will yield optimal result. Sofjan admitted that basically, businesses are ready to invest their money in infrastructure sector. But, the problem faced by the businesses is bureaucracy that reduces competitiveness. “The bureaucracy is too complicated, especially the licensing procedure”, Sofjan said.

              Sofjan also stated that currently from the aspect of labor wage, Indonesia not yet provides convenience to investors. Low inflation was responded by a very significant increase of labor wage. So, there are many Korean investors who postpone their investment in Indonesia. While in fact, they planned to relocate their factories from China in garment, electronic sector, etc.

           The government will provide incentive to private or state-owned investors investing in infrastructure project. This attempt is in framework of covering allocation of State Budget (APBN) fund which is very low. I \n the Master plan for Acceleration of Indonesia’s Economic Development (MP3EI), government’s infrastructure spending by 2014 is budgeted at Rp.363 trillions. While, in 2011 infrastructure spending is around Rp.26 trillion. For this year, the government budgeted Rp.30 trillions.

             Sofjan considered that looking at the above fact, to cover the high shortages of Rp.300 trillions only in 2 years or in 2013 and 2014, there have to be same breakthroughs, amongst other, increase of maximum limit of infrastructure budget through APBN-P 2012 and allocation of very large amount of budget for infrastructure in 2013 – 2014. The government should realize its plan to provide incentive to state-owned and private investors constructing infrastructure projects.

             Sofjan expected that with the incentive, it will increase the role of private enterprises in a sector that will support Indonesia’s economic growth. He explained that China, whose economy is growing rapidly, is because it is balanced with its extraordinary infrastructure. While, Indonesia’s economic growth is mainly supported by natural resources and consumption, meanwhile its infrastructure sector is left behind.