Tuesday, 2 July 2013

GOVERNMENT URGENT NOT TO RUN A POLICY THAT KILLS INDUSTRY



Various problems haunting the national manufacturing industry, from limited supply of gas and electricity, dependency on imported raw materials due to scarcity of raw materials in the domestic market, limited access to financing resource and high wages not accompanied by workers productivity had made the industry hard to grow and develop. Lastly was the government’s policy to increase Minimum Wages (UMP) 2013 30% on the average made the private sector loose competitiveness.

Chairman of the Indonesian Businessmen Association (Aspindo) Anton J. Supit stated in Jakarta on Thursday (20/12) that supposedly the Government played their role in maintaining economic stability for sustainable growth. The role of the state in managing the market must be enhanced by prioritizing long term interest without sacrificing investment climate. Anton reminded that to determine the level of salary increase must consider business resistance for the sake of company’s survival. A drastic increase of wages in one time might shake market stability.

Anton underscored that the Government’s main target was to enable people to find a job whereby they might have some income. This was impossible to realize if the Government ran a policy which killed the domestic industry. All nation were striving hard to maintain their industry, whereby to survive even in the most adverse condition. He rated the Government’s stipulation as strange when they deliberately increase minimum wages (UMP) significantly which eventually killed labor-intensive industries and made Indonesia an importing country. “On the one hand the Government wished to strengthen competitiveness but on the other hand they killed industry.” Anton said

He rate that Government was today not pro-businesspeople. The assumption was based on a series of facts, among others national energy policy which was rated as conservative, not being able to keep up with regional and global interest rate which dropped drastically; national energy policy not being on the side of national industry, but giving support to foreign industry instead the fiscal policy not being supportive to the dynamics of the market and business world; the case of inefficiency of APBD regional budget as transfer fund from the regions increased time after time; the case bureaucracy and corruption which axed Indonesia’s economic growth and the problem of unemployment and poverty.

Anton explained that amidst dynamic business development, the condition of Indonesia’s economic was still marked with low employment growth, so part time workers and semi-jobless cases tend to increase. He rated that Indonesia’s economic growth today was of no high quality because it was unable to energize the real sector of productive economic sectors which absorbed labor. For that matter, he said, the Government must be able to motivate investors to invest their capital in labor-intensive sector.

Anton also disclosed that today’s Government’s bureaucracy was still rated as an obstacle to the development of business climate in Indonesia. Therefore investment in Indonesia was way behind compared to other countries in Southeast Asia and East Asia. Anton elaborated that the procedure of permit application in other countries was only a matter of days. It was because there was efficient bureaucracy in Southeast Asian Countries and East Asian Countries. In Indonesia it might take weeks in permit application process so it had the impact on transaction cost to make it more expensive to the business world. “It is no longer a secret that to apply for administration service in Indonesia the procedure is very complicated and time consuming which made businesspeople to complain.” Anton concluded. (SS)

Business News - December 26, 2012

No comments: