There is no direct impact felt by the people as a result of the government’s first 100 days because of the ongoing debate on Bank Century and the delayed implementation of infrastructure programs, Kadin said.
The government said its 100-day programs would be 100 percent finished within President Susilo Bambang Yudhoyono’s 100 days in office, which falls on Jan. 31.
However, the Indonesian Chamber of Commerce and Industry (Kadin) said the programs, which aimed to improve regulations hampering the growth of the real sector, have yet to directly benefit the people.
“The government’s energy in the 100 days was diverted by the Century case,” Hariyadi Sukamdani, Kadin’s vice chairman on fiscal policies, taxation and customs, said Wednesday.
“Policies adopted to improve regulations have not overall had a direct impact benefiting the people.”
The House of Representatives’ inquiry committee summoned Finance Minister Sri Mulyani Indrawati and Vice President Boediono — as those considered to be most responsible for the bailout decision to save Bank Century (now named Bank Mutiara), which finally cost Rp 6.76 trillion (US$716 million).
Some lawmakers called for these leading government figures to step down during the inquiry and the intensity of this controversy may have undermined the effectiveness of the government.
Despite this, Coordinating Economic Minister Hatta Rajasa said the government had finished all but one of the planned 100-day programs. The unfinished program concerns the revitalization of the fertilizer and sugar industries under the Industry Ministry, he said.
The government aims to achieve average economic growth of between 6.3 and 6.8 percent during the next five years, said Hatta. Improvement of infrastructure will be the government’s main priority, he said.
Hariyadi said there are three steps that should be taken by the government to support the real sector.
First, that BI should urge banks to cut lending rates to about 10 percent and boost lending to the real sector.
BI data shows lending rates now hovering above 13 percent, although the BI policy rate is only 6.5 percent.
The central bank said it would now take steps to encourage banks to boost lending to the real sector.
Second, Hariyadi said the government should protect local industries to prepare against surging imports of cheaper Chinese products after the ASEAN-China Free Trade Agreement (ACFTA) became fully effective on Jan. 1.
“It can be by introducing non-tariff barriers like safeguards and anti-dumping measures,” he said.
The government may provide direct incentives for industries negatively affected by the ACFTA, said Finance Minister Sri Mulyani.
Hariyadi said the third step needed was that government should accelerate implementation of infrastructure programs to reduce the costs that burden the real sector.
Poor infrastructure, especially concerning seaports and roads have contributed to the high logistical costs, business people said.
