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The Indonesian Chamber of Commerce and Industry (Kadin) urged
the government Monday to give exact figures for the upcoming fuel price
increases to avoid further damaging local industries.
Kadin Chairman Mohammad Hidayat said the delay was fostering market
speculations, leading to price rises in other commodities.
The government earlier last week confirmed plans to increase fuel
prices on June 1, but continues to mull over the amounts, although a
price proposal approved by economic ministers said the increases would
average about 30 percent for all types of fuels.
"The government doesn't have to wait until next month as people have
already started making their own calculations and pricings," Hidayat
said.
"They need certainty before prices and costs become uncontrollable," he
said, adding that the confusion would continue to jeopardize the
competitiveness of local industries as they estimated the consequences
of facing higher fuel prices.
Citing the statements of members of the Organization of Land
Transportation Owners (Organda), which he met that day, Hidayat said
transportation costs would likely increase in proportion to the price
of fuel.
"If transportation costs are that high, our exports growth will
definitely suffer as selling prices would also go up," he said, "As a
result, our exports would become less competitive to foreign buyers."
He said the country's non-oil and gas exports would likely miss the
average 13.5 percent growth target set by the government earlier last
month.
Last year in the sector, Indonesia booked $91.94 million in exports, up
15.51 percent from a year earlier.
Organda reported that goods transportation and freight costs for
foreign and domestic shipments were estimated to increase by around 20
to 30 percent and that the rental fees for loading and unloading at
Tanjung Priok port would increase by an average of 100 percent.
In addition to high transportation costs, many studies, including by
the Asia Foundation, show business players in Indonesia are forced to
pay high illegal fees to pay off police and government officials.
The bribes raise operational costs for an average truck by 10 percent
per year, undermining the country's international competitiveness.
Indonesia's transportation infrastructure recently ranked 91st among
131 countries surveyed by the World Economic Forum, dropping from 89th
position last year.
The country ranked 54th out of 131 in a competitiveness study, and
123rd out of 178 countries in a survey by the World Bank in 2007, up
from 131 a year earlier, while its Southeast Asia competitors ranked
better, including Vietnam at 91st, and Brunei Darussalam at 78th.
The business survey analyzes conditions including facilities for
setting up new businesses, simplicity of licensing procedures and
investor protection.
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