Kadin prepares business guidelines

Rendi A. Witular, Jakarta

The Indonesian Chamber of Commerce and Trade (Kadin) is currently drafting a comprehensive five-year business guideline for the upcoming new administration to resolve various protracted problems currently faced by the business community.

The road map, which is being formulated by Kadin's Indonesian Economic Recovery Committee (KPEN) along with local and foreign business associations, is expected to improve the relationship between the government, the business community and the public.

Former Kadin chairman Aburizal Bakrie told The Jakarta Post on Wednesday that the road map was aimed at putting business sectors on the right track of development and ensuring that they would not lose direction in the future.

"There is a need to set up clear guidelines for businesses. The road map should be agreed upon by the government, the public and businessmen so that there will be no rifts between them in the future," said Aburizal, who is now the chamber's senior executive member.

Aburizal explained that currently there were so many conflicts hampering businesses due to the absence of clear guidelines. The conflicts include disputes in the steel industry between upstream and downstream players, and the rift between the Ministry of Energy and Mineral Resources and the Ministry of Forestry over mining in protected forests.

Another problem, according to Bakrie, is the absence of a clear business plan and regulations in the plantation industry, which should have become the country's main driver of economic growth given the abundant resources.

If the new elected government accepts the road map, which is scheduled to be completed in September, the country will have a strong chance of increasing its non-oil and gas export to at least US$100 billion in 2010 as against $60 billion targeted for this year, according to Kadin.

Although Indonesia is already in the economic recovery phase, the nation's economic growth remains unimpressive (4.1 percent last year, 4.1 percent predicted for this year). Analysts say this is because the growth is largely dependent on consumption, rather than investment and exports.

Kadin, the country's powerful business lobby group, expects that the road map will help boost investment by the private sector, particularly small and medium and enterprises, and expand exports, so that both will become key drivers of economic growth instead of consumption.

Exports have failed to emerge as a major growth engine in Indonesia, Southeast Asia's largest economy, due to various problems faced by the real sector, from legal uncertainty to labor disputes, from red tape to poor implementation of regional autonomy.

Aside from proposing guidelines, the road map will also specify problems faced by each business sector, and the possible solutions.

Aburizal said the business community would not press the new government to adopt the road map. Should the new government make a different plan from the one being made by Kadin, the business community would consistently launch intensive criticism against the government if it failed to revive the economy.

Earlier, Kadin's chairman Mohammad S. Hidayat called on presidential candidates Megawati Soekarnoputri and Susilo Bambang Yudhoyono to select as their key economic ministers those who understand business and financial markets, rather than academics.