T

he Indonesian Chamber of Commerce and Industry (Kadin) has called on the government to soon enforce the newly approved Land Acquisition Law so that all infrastructure projects currently under preparation could commence.

Kadin deputy chairman for infrastructure, construction and property Zulkarnain Arief said on Wednesday in Jakarta that throughout this year, many infrastructure projects to be developed as part of the government’s program for the acceleration and expansion of the country’s economy had been delayed due to land acquisition problems. “We expect this law will remove obstacles and plans can thus be realized as expected,” he said at a press conference on the country’s economic outlook for 2012.

Zulkarnain said the government should issue early next year supporting regulations for the implementation of the new law.

In a much-expected move, the House of Representatives endorsed the long-awaited Land Acquisition Law for public development in the middle of this month, which will ensure all legal proceedings pertinent to land acquisition for public infrastructure projects are finalized within 436 days at the latest.

Kadin chairman Suryo Bambang Sulisto also said that quick implementation of the Land Acquisition Law would further improve the investment climate, recently buoyed by the recent upgrade of the country’s sovereign rating to investment grade by rating agency Fitch Ratings.

On the same occasion, Kadin also estimated that the country’s economy would grow between 6.2 and 6.4 percent, slightly lower than the government’s estimation of 6.7 percent, due to the potential spillover from economic crises in advanced economies.

“If the government does not anticipate the impact of the global crisis, the economy will likely grow less,” the projection reads. Didik J. Rachbini, the chairman of Kadin’s Economic Study, Research and Development Center, said that the government needed to focus on the expansion of the industrial sector in order to be able to mitigate the impacts of the escalating global slowdown.

“Currently, service companies such as hotel services, transportation services and tourism drive our economic growth. In the future, we expect the industrial sector, which currently has low growth, to expand further,” he said, adding that the country’s non-manufacturing industry might grow up to 7 percent next year despite possible impacts from global downturn, which is putting pressure on the country’s exports.

Kadin chairman said that to support the movement of the real sector, Bank Indonesia would be required to pressure banks to cut their lending rate after the central bank cut its key rate to 6.5 percent in October.

“The ideal interest rate that can still be realistically achieved is around 8 percent,” he said.

— JP/Linda Yulisman