BUSINESSPEOPLE DISSAPOINTED BY BI RATE INCREASE

Businessplayers rated the BI’s policy to increase BI rate was against the interest of the real sector as it would weaken domestic industry and would hold back growth of the real sector in the real sector, the textile industry had to compete against imported products invading the domestic market. If the Government was serious about promoting the real sector they should give incentives, especially when businesspeople were troubled by increasing wages and electricity cost.

Businesspeople complained they were disspointed by BI’s policy which increased BI rate by 7.5%. They believed that the policy would not overcome domestic economic problems of today. Chairman of APINDO Sofyan Wanandi stated on Friday [20/12] what the Government should do was to protect the real sector. He rated that the economic condition today was uncertain and tend to injure all economic aspects. “So I think the Government should attend to the businessworld and the real sector,” Sofjan said.

Increased BI rate would burden the businessworld. He personally did not agree the interest to be increased, because it tends to make local businesspeople less competitive against foreign invasion. He asked BI-rate until next year and watch national import-export performance first. Sofjan rated increaseof Bi-rate made Indonesia’s economy to weaken.

One of the sustaining factors of national economy was domestic consumption which constituted more than 50% of GDP, but as soon as BI increased bank interest, businesspeople were beginning to feel production downturn and people’s purchasing power.

The economic climate with high bank interest, global economic uncertainty and haunting inflation had put national businesspeople in difficult condition. In spite of increased bank interest, it was not easy for businesspeople to increase prices. “This was hindrance to businesspeople.”

He showed as an example, today nearly all restaurants from five star to small ones were offering discount to customers. There were also people who preferred to eat in food courts instead of formal restaurants. Unless the Government took sound action, Sofyan reminded that next year economic condition might get worse, because this year production was completed while people’s purchasing power continued to slump. Meanwhile businesspeople rated that although the Government had launched policy packages to save economy, the execution tend to be slow and winding.

Increased BI rate also ignited fear among developers and the general public to own a house. Chairman or REI Setyo maharso rated that BI Benchmark rate was a strategy to overcome deficit in current transaction. Increased BI rate drew people especially the low income group, further away from their dream to own a decent home. Setyo urged the Government to make a policy package to support the businessworld, especially small and medium developers. “What more important, BI would not haste to increase rate” Setyo concluded.

Business News - December 27, 2013