Apindo Hopes That The Government Reviews The DHE Storage Policy Plan

JAKARTA - The Indonesian Employers' Association (Apindo) hopes that the government will review the plan for the detention of Export Result Foreign Exchange (DHE) policy within a minimum period of 12 months.

Apindo also encouraged the Government to review the implementation of PP No. 36 of 2023, which is considered less effective in maintaining the stability of the Rupiah exchange rate.

Apindo General Chair, Shinta W. Kamdani revealed that the plan to detain DHE for 12 months will have a domino effect on many business sectors.

Shinta revealed that the business world needs healthy cash flow to support operations.

"This policy is also considered counterproductive in an effort to support government programs related to downstreaming and increasing exports, as well as reducing investment competitiveness with neighboring countries, such as Vietnam," he said in his statement, Wednesday, January 22.

In addition, Shinta expressed other considerations felt by the business world regarding the imbalance between DHE-SDA deposit interest and working capital credit, where credit interest for working capital that must be borne by business actors is currently relatively high.

He added, to meet working capital needs due to the lockdown of DHE, the company must seek additional working capital credit facilities from banks.

According to Shinta, this will increase loan interest expense and not all companies have easy access to obtaining bank loans, which rely heavily on the credibility of each company.

The head of the APINDO Public Policy Division, Sutrisno Iwantono, added that the domino effect caused by this policy plan was also felt differently by business actors.

Sutrisno conveyed, for example, business actors in the fisheries sector who considered that the incentives provided were not sufficient, because the interest rates given were unable to cover the cost of working capital (cost of fund).

Sutrisno said that with the results of fluctuating fisheries production because it depends on the season and the weather, fishery exporters need more adequate working capital to cover losses during the famine period.

Therefore, Sutrisno conveyed that APINDO suggested that DHE's retention could be excluded for exporters of fishery products.

"The impact of implementing this regulation is also felt by the mining and plantation sector which is feared to trigger potential layoffs due to the company's unhealthy cash flow due to DHE detention," he said.

In addition, Sutrisno conveyed that it was also feared that there would be a domino effect on reducing coal and mineral production, which could reduce energy resistance.

Meanwhile, Sutrisno said the cocoa industry is also one of the sectors affected by this policy, where to cover the current work capital needs of 30 percent is required to be placed in the DHE-Source Natural Resources (DHE-SDA) account, the domestic cocoa processing industry is forced to make loans with commercial interest, which is 8-11 percent per year.

Meanwhile, the interest from the DHE-SDA futures account only provides an interest of 5 percent.

Sutrisno conveyed that the flower discrepansion stats, the domestic processing industry experienced a significant increase in interest costs so that it then had an impact on the competitiveness of national cocoa processed products in the world market arena.

In this case, Sutrisno hopes that the government can consider issuing processed cocoa products, namely cocoa pasta (HS 1803), cocoa fat (HS 1804) and cocoa powder (HS 1805) from the DHE-SDA obligation to support the competitiveness of domestically valued products and the sustainability of the national banking ecosystem.

"So, Apindo encourages the government to review the mandatory list of DHE detentions in each sector," he said.

Sutrisno said that with a number of impacts that could potentially arise with the detention of DHE, Apindo suggested that the government provide options for companies converting DHE to Rupiah not to be subject to detention.

Sutrisno conveyed this step ensuring that USD had entered the Indonesian economy, without causing additional burdens for exporters.

"We hope that the policies taken will not kill the competitiveness of exporters, which is one of the main motors of economic growth," he explained.

Sutrisno said that his party also encouraged the government to prepare a scheme where bank loan interest rates guaranteed with DHE deposits must be made the same as DHE SDA incentive interest rates which are stored in domestic banks.

"Thus, the increase in working capital costs due to the DHE policy can be zero or abolished," he said.