A recurring problem

A recurring problem

In the past few weeks cement has become rather difficult to
obtain. As a result of this shortage, prices have begun to
increase. Cement producers united in the Cement Association of
Indonesia are meanwhile preparing to propose an increase in the
commodity's bench price based on the fact that both raw and
supplementary materials have also undergone price increases.

The explanation given by the chairman of the association drew
varied reactions due to the fact that an increase in cement
prices is bound to have wide ranging effects. First, cement is a
price leader in the construction industry. An increase in the
price of cement will bring with it increases in other
construction materials as well as in labor costs. In this way,
higher cement prices will mean a higher inflation rate.

Second, cement prices affect housing development, in
particular the construction of modest and low-cost houses. Higher
cement prices would push up the price of modest and low-cost
houses and mean smaller profits for developers. This would
certainly limit the supply of these two types of housing, the
development of which already lags behind even under present
conditions.

Considering the fact that cement prices affect the lot of so
many people, it seems appropriate that an open discussion
regarding this problem be held with all those who have an
interest in the matter. This is a subject of great urgency since
it is estimated that until the end of this Sixth Five-Year
Development Period the supply of cement will continue to lag
behind demand.

-- Suara Karya, Jakarta