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Business people are starting to feel the benefits of the Economic Package

Reporter: Agus Triyono | Editor: Barratut Taqiyyah Rafie

JAKARTA. The issuance of economic policy packages, which currently number 14, is starting to benefit. The business community began to feel that the release of the economic policy package was sufficient to assist them in running their business.

One of the impacts is felt on the wage policy released by the government through the Economic Policy Package IV. Prijono Sugiarto, President Director of PT Astra International, said that the package of policies has provided certainty for the business community in running their business.

Understandably, with this wage policy, the determination of the provincial minimum wage (UMP) which was previously carried out based on the results of a survey of wage councils whose members consisted of elements from entrepreneurs, government and labor unions, is no longer used. After the policy package is issued, the determination of the UMP is calculated using a standard formula.

With the standard wage calculation formula stipulated in PP. 78 of 2015 concerning Wages, the UMP is calculated by adding the amount of UMP for the current year with the product of the UMP for the current year with the sum of inflation with national growth.

“This formula makes everything measurable, provides certainty in doing business. This is different from the previous one where the increase was uncertain,” he said in Indonesia’s 2017 Economic Outlook, last week.

Agung Pambudi, Executive Director of Apindo to Kontan some time ago, said that businessmen had also had a positive impact on the construction of a bonded logistics center spawned by the government through the Economic Policy Package II. This package of policies has made it easier for domestic industries to obtain raw materials at more competitive prices.

“There is confirmation, this policy makes Malaysia reduce their rates significantly. That’s good from the business side,” he said.

It is not only businessmen, from the government side, the issuance of economic policy packages is also claimed to have had a major impact on investment. Darmin Nasution, Coordinating Minister for the Economy said, for the economic policy package related to simplifying investment licensing for three hours issued through the Economic Policy Package Volume II, for example, has succeeded in drawing in an investment of Rp 291 trillion.

From this investment, 77 thousand new workers were successfully absorbed. Similar success has also occurred in the implementation of Policy Package VI in the form of tax facilities and ease of investment in special economic zones (KEK).

The package, until last September, was claimed to have been able to suck up investment of up to Rp 33.8 trillion. Meanwhile, regarding the revision of the negative investment list issued through the Economic Policy Package X, the government claims that 527 companies have used an investment value of US $ 12.926 billion.

There’s still homework

Even though it is considered successful, the implementation of the economic policy package still leaves a lot of homework. One of them is the package to reduce gas prices for industry. Although this package has been released since last October 2015 and is targeted to be enjoyed by the industry starting January 2016, until now the decline in gas prices has not been enjoyed by the industry.

Wiratmaja Puja, Director General of Oil and Gas, said that the calculation of the decline in gas prices has been delayed due to the complex structure of the gas price. This problem is triggered by the existence of gas middlemen, who are still rampant until now.

For that matter, President Jokowi said Cabinet Secretary Pramono Anung had ordered the Coordinating Ministry for the Economy, the Coordinating Ministry for Maritime Affairs, the Ministry of Industry, the Ministry of Finance and the Ministry of Energy and Mineral Resources to immediately complete the calculation of the decline in industrial gas prices by the end of November, so that it could be carried out in January 2017.

The president wants the price of gas for domestic industries to be reduced to the range of US $ 5 per mmbtu-US $ 6 per mmbtu. However, until this week, the calculation of the reduction in gas prices has not been completed.

Of the eleven industrial sectors that will be given a reduction in gas prices, only one; fertilizer, the calculation of which has already been reduced. “There is no need to explain how much the price is, hopefully according to orders,” he said after the Coordination Meeting on Gas Prices for Industry on Wednesday (9/11).

To quickly finalize the calculation of industrial gas prices before November, the government decided to form a small team. The team consists of director generals at the Ministry of Energy and Mineral Resources, the Ministry of Industry and the Deputy for the Ministry of BUMN and the Ministry of Finance.

The small team was given the task of a week to ten days to calculate the formula for reducing gas prices per industrial sector. “The team is also assigned to look at the legal aspects both upstream and downstream,” said Airlangga Hartarto, Minister of Industry.

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