Sat, 21 Feb 2004

Property mogul named Kadin chief

Fitri Wulandari, The Jakarta Post, Jakarta

Property magnate Mohammad S. Hidayat was elected late on Friday as the new chairman of the Indonesian Chamber of Commerce and Industry (Kadin), as the business lobby group struggles to bridge a communication gap with the government and resolve problems faced by the business sector.

Hidayat won the chairmanship with 64 votes on the last day of Kadin's two-day national convention, attended by some 90 Kadin regional offices and 18 business associations.

Rivals Sharif C. Sutardjo won only 30 votes, while Suryo B. Sulisto garnered a mere 14 votes.

Hidayat, who is also Golkar Party treasurer, succeeds Aburizal Bakrie, whose term has come to an end. Aburizal is competing with other politicians to represent Golkar in the presidential election.

Hidayat said he would resign from his position at Golkar at the upcoming party congress in order to commit to his four-year Kadin chairmanship.

Speaking at a press conference, he said Kadin's immediate priority would be to work closely with the government in determining economic policies to help revive the business sector.

He explained that, despite the hard-gained macroeconomic stability, investments in the corporate sector remained slow.

"Macroeconomic stability should be a catalyst for a revival in the micro sector," he said.

Over the past year, the rupiah has stabilized, bank interest rates have fallen to record lows and inflation has been brought under control. However, these gains have not translated into brisker investment activities, due to continuing problems such as lack of security, poor implementation of regional autonomy, labor disputes and the reluctance of the banking sector to resume corporate lending.

Hidayat said an increase in investment activities by domestic businesses was crucial in accelerating economic growth and creating more jobs, as the country could not rely on foreign investment due to election year uncertainties.

"We can actually push domestic investment, because we have the financing and human resources," he said.

A number of business leaders said earlier that it was crucial for the new Kadin executives to consolidate the institution to boost its bargaining power with the government in determining economic and business policies.

Meanwhile, Kadin issued a communique on an action plan to revive the corporate sector, excerpts of which follow:

- Resumption of banking intermediary role - Place limit on minimum wage increases - Minimize labor disputes - Eliminate red tape - Transfer abandoned forest concessions to qualified companies, particularly in agriculture, fishery and mining sectors - Restructure forestry-based industries - Establish Batam as VAT-free trade area; apply similar status to other industrial zones - Promote good corporate governance.