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Investment climate shaky: House member
Stand for the right: Indonesian Workers Union Association (Aspek) president Mirah Sumirat has called on the government to anticipate massive layoffs by lowering fuel and basic commodity prices so that the peopleâs purchasing power can be maintained
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span class="inline inline-center">Stand for the right: Indonesian Workers Union Association (Aspek) president Mirah Sumirat has called on the government to anticipate massive layoffs by lowering fuel and basic commodity prices so that the people's purchasing power can be maintained.(Antara)
Mass layoffs announced at companies such as Ford Indonesia, Chevron Indonesia and Japanese electronics giants Panasonic and Toshiba constitute a flashing yellow warning light from Indonesia's investment climate, a lawmaker has said.
Chairman of House of Representatives Commission VI overseeing industry and state-owned enterprises, Achmad Hafisz Tohir, urged the government to immediately implement stimulus packages aimed at improving the investment climate.
Hafisz said industry relocations were behind the massive layoffs, sending a signal that Indonesia was considered a less-attractive country in which to do business and earn profits, especially because of high tariffs, taxes and logistical costs.
"As a result, our imported goods are so expensive that investors may think twice before investing and doing business [here]. The layoffs have worsened our investment climate. However, the yellow light is only approaching orange, not shifting to red, yet. The government still has a chance to fix the situation," Hafisz said at the House complex in Jakarta on Thursday.
At the same event Trade Minister Thomas Lembong admitted the lack of infrastructure has affected investment and business. "Excessive regulation, prolonged licensing processes and poor infrastructure has reduced our competitiveness," he said.
Thomas, however, argued the relocation of two Japanese electronics giants was due to Japan's shifting focus from home appliances to other goods such as optic censors and drones. At the same time, however, Korea's electronic-appliance industry is on the rise.
"The Japanese electronics industry is being hit by fierce competition from electronics from Korea," he told the reporters.
Meanwhile, Cabinet Secretary Pramono Anung clarified the reports of the layoffs, saying the two Japanese electronics manufacturers were not shutting down their operations, only relocating.
"Yesterday I spoke with their respective managements. In essence, they are not shutting down business, but they are downsizing to reduce production capacity and relocate plants. It has been reported to President Jokowi," Pramono told reporters at the State Palace.
He also dismissed allegations that the Japanese were 'taking revenge' after Indonesia chose China for the high-speed train project.
"The value of Panasonic and Toshiba investment in Indonesia alone equal to the high-speed train project. Thus, it is impossible if the business is shut just because of revenge for failure in cooperation in the project," he said.
Earlier, Confideration of Indonesian Workers Unions (KSPI) stated more companies planned to lay off workers in the near future, following the laying off up to 2,500 workers at Panasonic Lighting Indonesia and Toshiba Consumer Products Indonesia. (ags)(+)
