Kadin wants piece of infrastructure pie

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The Indonesian Chamber of Commerce and Industry (Kadin) wants the government to give local companies a chance to bid on infrastructure projects.

Speaking during the opening of the organization’s 44th national leadership meeting on Tuesday, Kadin chairman Suryo Bambang Sulisto said it was high time for local companies to benefit from the government’s increased spending on infrastructure.

“We hope the government will prioritize local companies for handling state-funded projects under Rp 20 billion [US$2.09 million] in value,” Suryo said at the opening ceremony, which was attended by President Susilo Bambang Yudho-yono and several ministers.

The involvement of the local companies would help the government realize its Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI), Suryo said.

At the event, Kadin representatives signed a memorandum of understanding (MoU) with the Industry Ministry, Trade Ministry and Home Ministry to better coordinate the empowerment of local businesses.

Kadin members were optimistic that Indonesia could maintain economic growth above 6 percent this year provided that the government channeled the state budget to where it was really needed, Suryo said.

“Kadin’s members support the government’s plan to wipe out the fuel subsidy. The state has spent hundreds of trillions of rupiah so far when the money could be better used on infrastructure or for other projects,” Suryo added.

The chamber also urged the government to establish a state investment firm (IIF) to assist state-owned companies in investing overseas.

According to Suryo, global crises and economic uncertainties have brought change that make it easier for Indonesian firms to acquire foreign assets.

“The money allocated to inefficient subsidies can be channeled to the IIF. It can help state-owned oil company Pertamina acquire oil refineries or [State Logistics Agency] Bulog acquire soybean farms,” he said.

In the 2013 draft state budget, energy subsidies account for Rp 274.74 trillion. This figure exceeds the government’s planned Rp 200 trillion allocation for infrastructure spending.

Meanwhile, the President said he welcomed Kadin’s idea to create the IIF, adding that Indonesia should expand overseas to cope with higher demands in industry and trade.

Yudhoyono also said he received many prominent industry leaders during his visit to the New York Stock Exchange recently, proving that Indonesia had a unique position among emerging countries.

“The world’s population will grow to about 9 million people by 2045, up from 7 million last year. I hope Kadin can create more business opportunities based on this fact and in the interest of foreign businesses in Indonesia,” he added.

Commenting on the MoU, Deputy Trade Minister Bayu Krisnamurthi said the ministry had begun to revitalize traditional markets outside the capital in an attempt to improve local businesses.

“We have also created regulations that benefit local entrepreneurs. For example, the upcoming franchise regulation aims at limiting company-owned units each franchisor operates to provide business opportunities for the others across the country,” he said.

Kadin’s national meeting is taking place in Yogyakarta and will run until Oct. 4.