“Industry Still Stagnant Next Year”
Friday, 15 December, 2006 | 14:11 WIB

TEMPO Interactive, Jakarta: The performance of industry next year, especially the textile and automotive industry, are predicted to be of no difference with 2006. The reason is that the bank interest rate, as one of the sources for stimulating industry, is not to be significantly reduced from 11-12 percent.

“Even the BI Rate of 9.75 percent is yet to be enjoyed by the textile industry,” said the adviser to the Indonesian Textile Industry of West Java, Lili Asdjudiredja, yesterday (12/14) in Jakarta. According to him, the slow cut of interest rate by banks have indirectly hampered the textile industry in developing its business and improving investment.

The high cost of the economy and flooding the market with Chinese textiles has deeply weakened the textile industry's competing power compared to those of neighboring countries. “Minimally, we need a 7 percent interest rate,” said Lili. “If it is not seriously handled, there will be more industries that will collapse.”

The Secretary General of the Indonesian Textile Industry, Ernovian G. Ismy, has also requested that the BI Rate stand at one digit so that industry can finance machinery restructuring, productivity improvement and flexibility in paying taxes and the cost of energy.

Marketing Director of PT Toyota Astra Motor, Joko Trisanyoto, has in fact acknowledged that the non-aggressive economic growth in 2007 is a picture of the automotive industry next year.

However, Joko stated that he respected the central bank's decision that slows interest rate cuts in 2007. The automotive industry will not only require an interest rate cut, but also the combination of the interest rate, improving the rupiah exchange rate and the speed of the inflation rate. “So that macroeconomics remains stable.”

RR Ariyani