Exporters asked the government for funding and policy support to improve export performance. The support should be given to balance cost of production and marketing to a number of export destination countries. Some industry sectors such as textiles, shoes, furniture, children’s toys, food and beverages, and pulp are currently experiencing under transaction. Therefore, financial support provided by the Export Import Financing Institution (LPEI) may be considered.
Chairman of the Indonesian Exporters Association (GPEI), Benny Sutrisno, in Jakarta (Friday, September 13), expects the government to provide assistance in the form of State Capital Participation (PMN) to strengthen LPEI’s capital at Rp.1 trillion. According to Benny, LPEI has helped exporters, but it still lacks in capital. “We currently need a substantial budget to increase exports, and LPEI is expected to carry out that role”, said Bennny.
He also sees that every region in Indonesia has a great potential to contribute to national economic growth. At the local level, the potential ranges from tourism, agriculture, and industry development which can even be export-oriented. Therefore, there should be a national program to develop regional potency by promoting regional exports. Such activity is expected to increase the capacity of local entrepreneurs and reduce unemployment rate.
The potency of commodity exports-oriented regional businesses, if its financing is supported by financial institutions, will be able to increase the role of local entrepreneurs in the national and international market, which in turn is able to increase the revenue potential of the country. He said that to facilitate financing access as well as gaining access to market to do exports, small businesses which are just starting to export can cooperate with local exporters who have similar products.
Even though export potential in the region is high, small and medium enterprises (SMEs) in the region are constrained by lack access to bank financing. Many requirements imposed and the minimum knowledge of local entrepreneurs on exports is a major problem which is frequently encountered. The problems were triggered by the limitations of SMEs in managing finances, so it becomes unbendable. He said that the application of 1% tax for SMEs who have a turnover of less than Rp.4.8 billion is positive so that SMEs can manage companies in a professional manner and with good governance, making it bankable.
Meanwhile, the government assigned LPEI to better support national export program, as an attempt to improve trade balance deficit, which in the second quarter of 2013, reached USD 3.7 billion. Acting Head of Fiscal Policy of the Ministry of Finance, Bambang Brodjonegoro, explained that LPEI’s function is to secure the export program, but is special assignment is to anticipate if there are banks, non-bank financial institutions, and insurance agencies who are unable to perform the task of guarding the national export sector.
Bambang added that this special assignment in the form of National Interest Account (NIA) program, a policy to support the national export which is non-commercially viable, but is necessary to preserve export value. He said that the government would provide capital reinforcement to LPEI to help implement NIA, so that the conditions of the national exports is not too declining in the face of the weakening demand in export destination countries. He said that for 2014, his party will strengthen the capital system and make them as one instrument to encourage real exports
Business News - September 18, 2013