JAKARTA - Minister of Finance (Menkeu) Purbaya Yudhi Sadewa stated that the Indonesian Chamber of Commerce and Industry (Kadin) request to obtain financing incentives for the furniture industry aims to increase the competitiveness of national business actors in the global market.
He said that Kadin was facing competitive pressure from other countries such as Vietnam, especially in terms of financing costs.
"Their competitiveness with the outside world, there is Vietnam of all kinds in terms of financing, is disrupted because the interest is lower than that country," said Purbaya after a limited meeting with President Prabowo Subianto at the Presidential Palace complex, Jakarta, quoted by Antara, Saturday. 20 December.
The Minister of Finance explained that Kadin questioned whether the government had a financing scheme that could help furniture industry players, especially to reduce the burden of capital costs.
According to him, one of the instruments that can be utilized is the Indonesian Export Financing Institution (LPEI). However, he admitted that the distribution of LPEI financing to the furniture industry is currently relatively small.
"I have LPEI, I will see what LPEI is like, not just high interest, but the amount of money disbursed by LPEI is still low. They say only Rp. 200 billion, even though the furniture industry needs up to Rp. 16 trillion," he explained.
However, Purbaya emphasized that the government would first evaluate the internal conditions of the LPEI. This is because the institution previously faced a number of problems that needed to be corrected.
Furthermore, the government is open to providing incentives or financing support as long as the policy is targeted and able to increase the competitiveness of national industries, especially the furniture sector which has great export potential.
As previously reported, entrepreneurs who are members of the Indonesian Chamber of Commerce and Industry (Kadin Indonesia) proposed incentives to deregulate the furniture industry to Purbaya.
"We just discussed about deregulation or what incentives can be done, ranging from funding to also focusing on how to industrialize," said Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Anindya Bakrie in Jakarta, Friday.
He explained that the global furniture export opportunity could reach 300 billion US dollars, while Indonesia's current share is only around 2.5 billion US dollars.
This data indicates that the contribution of the Indonesian furniture industry is relatively small in the midst of large export market opportunities.
During the meeting with Purbaya, entrepreneurs proposed various support schemes that the government could provide.
In addition to funding and industrialization strategies, entrepreneurs also conveyed considerations for more even market diversification, given that currently Indonesia's furniture export market is still concentrated in the United States with a share of up to 60 percent.
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