T

he government'€™s latest economic policy package has received a warm welcome from business players and economic observers, who regard the package as an important breakthrough that could revive slowing business activity.

Indonesian Textile Association (API) chairman Ade Sudrajat said on Thursday that the new package, the third launched by President Joko '€œJokowi'€ Widodo'€™s administration since late last month, was helpful and '€œpretty concrete'€.

He said the new package had brought new hope to textile companies because it would enable them to reduce operating costs.

'€œThe previous first and second policy packages improved the ease of doing business and the third will make it possible for textile makers to call laid-off workers back to work,'€ he told The Jakarta Post.

The latest package, which offers a 30 percent tariff discount on electricity usage from 11 p.m. to 8 a.m., among other things, will make it possible for many textile manufacturers to resume their operations as it will significantly cut their operational costs, he said.

As many as 30,000 textile workers have been laid off so far this year, according to the association.

Fishermen and Farmers Community (KTNA) chairman Winarno Tohir and fertilizer maker PT Pupuk Sriwijaya corporate secretary Zain Ismed said that the third package would make their products more competitive compared to imported ones.

Zain said that if gas prices for fertilizer production were lowered as promised by the government in the new policy package, it would be quite helpful because the expenditure for gas accounted for the largest part of fertilizer production costs.

Lowered diesel fuel prices could also assist Indonesia'€™s fishing community. '€œWhile the price cut is not very big, it will help fishermen to get more affordable diesel fuel to go fishing,'€ Winarno said.

Under the third policy package, diesel fuel will be slashed by 2.7 percent to Rp 8,300 (60 US cents) per liter from Rp 8,400 per liter previously.

Winarno also said that the expansion of the government-sponsored micro-loan (KUR) program and the cut in the KUR interest rate to 12 percent from 22 percent would significantly help fishermen and other small businesses.

'€œThe government should assure those concerned that there will be enough diesel supply for all fishermen in the country,'€ he said, adding that the banks should ease requirements in order to help fishermen benefit from cheap KUR loans.

He added that currently, many banks were reluctant to provide loans to fishermen because they were often deemed a risky bet.

Meanwhile, Bank Central Asia (BCA) economist David Sumual said that the third package was '€œmore focused'€ and helpful for industry, especially those industries that used large supplies of electricity and gas.

'€œLower energy tariffs can help industries that have high energy costs, such as the petrochemical, fertilizer and ceramic industries. High costs in energy make it difficult to compete with similar manufacturers in neighboring countries,'€ David told the Post on Thursday.

CIMB Niaga economist Winang Budoyo expressed a similar view. He saw the third package as one that was '€œsharper and more down-to-earth'€ because of its focus on pressing down on costs that created problems for industry. With the electricity incentive, Winang said industry would be able to improve their cash flows, which have been impacted of late by the weak economy.

By helping out industry, Winang said the government wanted to maintain people'€™s purchasing power so as to keep spurring consumption.

Glenn Maguire, ANZ chief economist for South Asia, ASEAN and the Pacific, and Weiwen Ng, ANZ economist for ASEAN and the Pacific, offered different views on the new package, saying that the impact of the third package would likely be marginal, and it was unlikely to bolster either confidence or economic activity.

Maguire and Ng said the third package seemed to aim more at reducing administrative redtape, rather than offering a substantive set of stimulus measures that could elicit a strong and positive consumer and corporate reaction.