T

he government'€™s new economic policy package will not resolve the real problems currently being faced by Indonesian companies because it is mainly designed to mend structural problems in the economy, the Indonesian Chamber of Commerce and Industry (Kadin) has said.

Kadin chairman Suryo Bambang Sulisto said that most of the country'€™s businessmen were facing cash-flow problems not only to finance their day-to-day activities, but also to pay their debts and import financing, which has become more costly lately because of the sharp drop in the rupiah against the US dollar.

'€œAll businessmen are experiencing financial difficulty. And this has not been specifically addressed by the government. Businessmen need a healthy cash flow to run their businesses,'€ Suryo told reporters on the sidelines of a national working meeting (Rakernas) of Kadin'€™s association coordinating division on Wednesday.

Many companies are reducing their activities, and some have even laid off workers because of financial difficulties, he said.

'€œThe government needs to help these ailing companies because if they collapse we will see more layoffs,'€ Suryo said. According to him, the government should establish a mechanism to help ailing companies restructure their debts such as through an extension of the maturity of their debts.

'€œBanks need to be cooperative about this too. They cannot just seize the companies'€™ assets if they default because it will worsen the problem,'€ Suryo said, citing an example of a regulation that the government should issue to help the business community.

Meanwhile, Noke Kroyan, vice chairman for Kadin'€™s association coordinating division, also criticized the government'€™s lack of communication with the business community. He said that the government should at least talk to Kadin before issuing important economic policy. As the largest business organization in the country, Kadin could help the government to find out the real problems in the business sector and also give input on how to solve problems, he added.

'€œWe cover more than 200 business association at Kadin. These are the associations of business players. They know most of what happens on the ground and they really understand what policy needs to be made to address business problems,'€ he explained.

The policy package contains amendments of 89 regulations across different sectors, such as liberalizing the tourist sector by relaxing foreign tourist visa requirements and opening up the property sector by allowing foreign ownership of apartments worth more than Rp 10 billion (US$689,400).

The package also includes the government'€™s program to accelerate village funds disbursement through a cash-for-work program, providing more rice to the poor, strengthening the role of cooperatives such as village trading houses and providing liquefied petroleum gas (LPG) converter kits '€” which is expected to help improve fishermen'€™s welfare by slashing their fuel costs.

Meanwhile, Coordinating Economic Minister Darmin Nasution, who attended the Rakernas, encouraged all associations in the country to cooperate with the government to boost exports through strengthening the country'€™s industry.

According to Darmin, strengthening industry to boost exports was the only way out of the ongoing sluggish economy.

'€œTherefore, the newly announced economic package is centered on industry and trade because these two sectors are the ones that are volatile today,'€ he said in his keynote speech at the meeting.

'€œLet us collaborate, synergize and consolidate,'€ he said. (saf)