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Industry Ministry allocates $7 million, proposes stimulus package to help affected industries
Among the hardest hit industries are the automotive industry, the aviation industry, the electronics industry and the textile industry.
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Indonesia Hotel and Restaurant Association (PHRI) chairman Hariyadi B. Sukamdani talks to the press on the impact of the coronavirus epidemic on tourism in Jakarta on March 12. (JP/Riza Roidila Mufti)
T
he Industry Ministry has reallocated Rp 113.15 billion (US$7.01 million) from its initial budget and is currently proposing a stimulus in a bid to salvage industries that are hardest hit by the COVID-19 outbreak.
Industry Minister Agus Gumiwang Kartasasmita said in Jakarta on Monday that among the hardest hit industries were the automotive industry, the aviation industry, the electronics industry and the textile industry.
"Generally, almost all industrial sectors are affected by COVID-19 and thus need extra attention," he said during a teleconference meeting with the House of Representatives.
Out of the Rp 113.15 billion, Rp 92 billion will be used to aid small and medium enterprises (SMEs) by spurring new entrepreneurship potential, restructuring SMEs' machinery and equipment, assisting with raw materials and strengthening SME centers in the metal, transportation, machinery and electronics sectors.
Meanwhile, the ministry is proposing an additional stimulus that includes a soft loan to help companies’ cash flow, a fixed rate for buying gas from state gas distributor PGN and delayed payments to the Workers Social Security Agency (BPJS Ketenagakerjaan).
It will also suggest revisions to waste management that have hampered industries, relaxations of loan payments and interest rates as well as a loan scheme for companies to pay Idul Fitri holiday bonuses (THR). It will also guarantee industries producing and distributing essential goods in a bid to maintain supplies for the public.
Asked about what stimulus his industry needed, the Indonesian Association of Medical Device Manufacturers (Aspaki) Division I head overseeing domestic product promotion, Erwin Hermanto, on Tuesday suggested that the government could subsidize raw materials, stabilize the rupiah exchange rate and ensure that transportation, logistics and imports were not disrupted by the government’s partial lockdown measures.
He also asked the government to relax import tax and duties for machinery and raw materials needed to produce protective gear and masks. The government could also push state banks to facilitate low-interest loans to buy machinery and expand the necessary facilities to produce such items.
"ASPAKI supports government policies that prioritize domestic needs and develops domestic production to meet needs during the COVID-19 pandemic," he said.
Meanwhile, Indonesian Chamber of Commerce and Industry (Kadin) vice chairman for industrial affairs Johnny Darmawan said on April 1 that the association had put forth stimulus suggestions in March to help low-income families and affected industries, some of which had already materialized.
These include electricity discounts rolled out last week. Postpaid customers in the 450 volt-ampere (VA) category will not be charged for electricity for April, May or June while postpaid customers in the 900 VA category will receive a 50 percent discount on their electricity bills over the same three months.
He also pointed to several tax breaks for employees and companies as well as aid directed at informal workers and small businesses, among other incentives needed to keep the economy going.
"For companies, [incentives] are ways to keep the ball rolling despite cash flow problems, as companies still need to pay salaries and for maintenance," said Johnny, referring to corporate tax and loan rescheduling policies.
