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High unemployment and poverty levels are partly the result of
the government's failure to empower small and medium enterprises
(SMEs), Indonesian Chamber of Commerce and Industry (Kadin) chairman
Mohammad S Hidayat says.
Speaking Wednesday to the annual conference of Kadin's North Sumatra
branch in Medan, Hidayat said the government had failed to strengthen
SMEs and to develop the country's infrastructure.
He said that of the 43.4 million SMEs registered by Kadin, only 5
million of them received any government support.
"This is proof that the government has yet to succeed in strengthening
our SMEs. If handled properly, they could contribute positively to the
growth of business in Indonesia," he said during his address.
With slow real-sector growth, it will be difficult for the government
to create new job opportunities and to reduce the number of people
living under the poverty line.
"Based on Kadin figures, the number of poor people in Indonesia stands
at 39 million, higher than the 37 million reported by the government.
Meanwhile, the number of jobless people stands at some 11 million," he
said.
Regarding infrastructural development, Hidayat said that the
construction of highways, bridges, power plants, etc., was not
progressing as expected.
"This is because the role played by local investors in infrastructural
development is still limited," he said. Given these circumstances, it
was reasonable that most major infrastructure projects were awarded to
foreign investors.
Hidayat said that he was aware that the government faced a lot of
hurdles in its attempts to improve the nation's infrastructure,
particularly as regards land acquisition.
"We want the government to issue a regulation on land acquisition, just
as in the developed world, so that middlemen and speculators cannot
jack up prices as they please," he said.
Speaking at the same event, Investment Coordinating Board chairman
Muhammad Lutfi asked North Sumatra governor Rudolf Pardede to
immediately set aside land to be used for the development of a special
economic zone (SEZ) in order to attract more foreign investors to the
province.
"Actually, none of the provinces have yet to submit their reports. But,
this is important for North Sumatra province as the Penang (Malaysia)
minister has informed me of his desire to cooperate with Medan, given
declining competitiveness in Penang nowadays," he said.
"Last year, North Sumatra was the fifth best foreign investment
destination in the country. Japan was the biggest foreign investor on
$3 billion, followed by the U.K. on $2.5 billion, Luxembourg on $940
million, Malaysia on $900 million and Singapore on $820 million," Lutfi
said
Rudof said he had promised Lutfi that he would promptly submit a list
of potential zones as requested.
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