Businesses Asked to be Innovative amid Rupiah`s Appreciation

TEMPO.CO, Jakarta - The strengthening of Indonesian rupiah currency, which has appreciated from about Rp14,709 per US dollar a week earlier to Rp13,483 on Monday, will offer a good momentum for industries to develop creativity and innovations.

General Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Suryo Bambang Sulisto affirmed that companies, as part of their business governance, needed a concerted vision in order to increase their creativity and innovations.

"Creativity and innovations in business governance can double business expansion and company profits," Sulisto noted in a written statement on Monday.

Therefore, Kadin has suggested that the subsequent policies to be issued by the government should support the positive momentum of the rupiah, which has been appreciating over the past few days against the greenback.

"The positive momentum needs to be supported by the governments correct and accurate policies," Deputy Chairman of Kadin for banking and financial affairs Rosan Perkasa Roeslani noted.

He expressed hope that the positive indication, in the form of the appreciation of the rupiah and the stock composite index values over the past few days, would be the early signs of the improving Indonesian economy.

In the meantime, Bank Indonesia (BI) said it will remain alert for global economic developments despite the rupiahs significant appreciation against the U.S. dollar during the past week.

"Lets see, may the recovery continue. Yet, we must also continue to look at external factors in the United States and other countries," Deputy Senior Governor of Bank Indonesia, Mirza Adityasawara said on Friday.

Based on the JISDOR BI rate, the rupiah traded at Rp13,521 per U.S. dollar on Friday against Rp13,809 per dollar the day before. Four days ago, the Indonesian currency was still hovering at Rp14,604 per dollar.

"Three days ago, the rupiah had strengthened significantly because many had cut their losses short. Some have cast doubts that the rupiah would hit a level of Rp13,800 per dollar. I once stated that the assumed exchange rate set during the state budget is Rp13,800. However, the assumption is based on weak macro-economic conditions," he stated.

He added that the rupiahs exchange rate is still competitive and will spur the export of manufactured goods and keep the inflation rate in check because the increase in prices of imported goods will be held by the rupiahs appreciation.

Chief Economic Minister Darmin Nasution said on Friday the appreciation of the countrys currency after depreciating for the past few months had provided an opportunity to businesses to start their ventures again.

Nasution pointed out that the rupiah`s appreciation had happened in concurrence with the issuance of the governments package of economic policies, which could give certainty to businessmen regarding the nations future economic prospects.

He said that speculative efforts made in response to global economic developments had caused the rupiah to continue weakening, but it had rebound during the last few days.

"We tend to buy U.S. dollars and speculate on what has happened during the past few weeks and it seems they have now stopped, which has given an opportunity to the rupiah to appreciate," he stated.

"This will offer opportunities to businesses to take a decision regarding their ventures. So what we have done through the economic policy packages should be responded to as an incentive to start again," he said.

Nasution said despite the rupiah's appreciation, the government had remained cautious with regards to the rupiahs movement and global economic conditions because the problem was not yet settled at least until certainty over the Federal Reserves interest rate hike is confirmed.

"We remain alert. It does not mean it is all settled. The worlds economic problems are not yet settled. So, do not conclude that it is settled. However, the tendency is good," he stated.

The chief economic minister said the governments economic policy package should therefore be seen as an incentive to start building economic creativity and innovations.

Kadin deputy chaimrnan Rosan Perkasa Roeslani hailed the third tranche of the governments economic policy package issued last week as positive. He welcomed the governments resolve in making the industry as the countrys economic foundation and its step to reduce industrial cost.

Roeslani cited as an example the governments decision to provide a 30 percent electricity tariff cut for industries operating between 11 p.m. and 8 a.m. local time.

Besides availing incentives from the government, industries should also be creative and innovative in their business plans. Innovations will determine the future of a company.

Kadin Chairman Suryo Bambang Sulisto cited Uber, Californias San Francisco-based transportation network company, as an example of good innovation.

He said Uber, due to its digital innovation, has built a worldwide market capitalization of about US$50 trillion. This is a huge leap as the company is new, but its market capitalization is almost equal to that of Goldman Sachs, which has run its business for almost a century.

Uber mastered the excellence by applying its innovative digital management system, so that it is able to operate numerous vehicles without having its own transportation vehicles and broaden its reach to a larger market, according to Sulisto.

ANTARA