Kadin asks for govt help in facing free trade

The Jakarta Post, Jakarta

The Indonesian Chamber of Commerce and Industry (Kadin), the country's largest business lobby group, urged the government to help local firms in dealing with tighter competition resulting from the free trade era.

Kadin chairman Aburizal Bakrie stressed on Thursday that without government support, efforts to restore the country's ailing economy would become more difficult.

"The business sector cannot play an optimum role without the support and constructive role of the government," Aburizal said during a speech on the last day of Kadin's three-day congress, which was also attended by President Megawati Soekarnoputri.

He fell short of saying, however, whether the government should impose protective measures to help local firms in facing competition from foreign players in the domestic market.

The theme of the congress was: "Restoring the national economy by winning the domestic market."

A number of business leaders had earlier asked the government to protect the domestic market against an influx of foreign products and services as many local players were not yet ready to deal with the free trade era.

They argued that without government protection, particularly amid the current global economic slowdown, many industries would go bust, thus creating more unemployment.

Elsewhere, Aburizal said that the basic conditions necessary for a recovery by local industry were not yet present. He did not elaborate.

But businessmen had earlier said that the current high interest rate environment made it difficult for them to obtain bank loans at affordable rates.

They also said that the government should accelerate the restructuring of corporate debt to allow banks to resume lending.

Aburizal also claimed that the government's policy of revitalizing the real sector had not been consistent and lacked a clear focus.

Meanwhile, Megawati urged local businesses to start seeking projects and financing outside those provided by the government.

She said in her speech that businesses must be aware of the reality that the state budget could not longer serve as the locomotive of the economy.