Rini establishes new crisis center to help businesses

Adianto P. Simamora, The Jakarta Post, Jakarta

The Ministry of Trade and Industry has set up a crisis center to help resolve the various problems faced by businesses here, a move which could help prevent existing investors from fleeing the country.

It will be chaired by Minister of Trade and Industry Rini M. Soewandi herself and consist of members drawn from the business sector, top officials from the relevant government institutions and the police.

The crisis center, to be officially launched on Monday, will be located on the 12th floor of the ministry's offices.

"The crisis center is aimed at supporting businesspeople in doing business here. We will collate all their complaints and try to seek a solution as expeditiously as possible," Rini told reporters on Friday following a meeting with business associations.

Rini said that in the near term, the crisis center would focus on resolving long-standing problems, particularly those concerning labor conflicts, smuggling and security issues.

Many have said that the these problems have caused foreign investors to shun the country, and even existing businesses have reportedly been considering moving their operations to other countries in the region.

The significant drop in foreign direct investment (FDI) during the first half of this year as well as declining exports have been mainly attributed to these problems.

Last month, Rini said that labor conflicts were one of the major factor causing the dismal export performance as foreign buyers shifted their orders to other countries due to fears that local exporters could face problems in meeting delivery schedules.

"I see the labor issue as something that must be resolved as quickly as possible," Rini said.

She was referring to ministerial decree No. 150/2000 on labor affairs, which had been overly protective of workers at the expense of employers.

In order for Indonesia's economy to grow at a respectable rate of around 6 percent per year so as to be able to absorb the huge numbers of unemployed, exports and investment must be pushed as the cash-strapped government can no longer be expected to pump prime the economy. A continuing decline in exports and investment would also depress consumer spending, the main driver of this year's estimated 4 percent economic growth.

"Regaining investment is very vital for the recovery of our economy and creating more new jobs," Rini said.

But Rini said that without fixing the labor problems, any government policies to attract new investment and boost exports would be ineffective.

Rini also said that curbing rampant smuggling would be a top priority for the center.

"But we cannot go alone, we have to go hand-in-hand with other ministries and businesspeople in resolving this problem," she said.

The crisis center would focus its antismuggling effort on top commodities including textiles, electronics, footwear, sugar, logs and crude palm oil.

Many parties have long complained that poor law enforcement, graft and collusion have allowed smuggling to flourish in Indonesia, especially in the five years since the economic crisis hit the country.