GOVT URGED TO GIVE INDUSTRIES INCENTIVES TO FACE ACTFA

Jakarta, Jan 12 (ANTARA) - The Association of Young Indonesian Businessmen or HPMI has urged the government to provide special incentives for domestic industries to help them face tough competition from foreign goods under the ASEAN-China free trade agreement (ACFTA).

"We can renegotiate the ACFTA if it cannot be cancelled, but this will be only a defensive measure. The government should take an offensive measure by providing incentives for industries," Hipmi trade division chairman Harry Warganegara said in a discussion here on Tuesday.

According to him, some of the incentives needed by the businessmen were lower interest rates for exporters and assistance to register the brands of small and medium enterprises (SMEs).

In addition, Harry also urged the government to focus its attention on the improvement of infrastructures and the security of energy supplies for industries.

"ACFTA has both a positive and negative impact. There are some things which can be done by the entrepreneurs themselves, and by the government such as solving infrastructure problems," he said.

Transport costs of goods from one place to another in Indonesia
are still high so the prices of locally produced goods were higher than those of Chinese products.

Meanwhile, head of the Department of Economics, Faculty of Economics, University of Indonesia, Prof. Nazara Suahasil believed although ACFTA threatens many domestic industries,there were some opportunities open to Indonesia.