ANNOUNCEMENT 09 Jun 2009In June 2009, the government of Indonesia announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
The Jakarta Post, 09 June 2009 (only limited information is available on the Ministry of Industry's website, http://www.depperin.go.id/ENG/Publication/IndReview/2009/20090707.htm)
The Industry Ministry has agreed to give Rp 50 billion (USD 5 million) to state owned sugar makers in a bid to revitalize the sugar industry and to attain self-sufficiency for all domestic demand, both for households and for industrial use, by 2014.
The fund will be distributed in the form of 10 percent subsidy for every purchase of new machinery by nine state sugar companies (including PT Perkebunan Negara and subsidiaries, PT Rajawali Nusantara Indonesia and subsidiaries, and PT Madu Baru - a joint venture between the Yogyakarta Sultanate and the government).
According to Director General for Metal, Machinery, Textiles and Miscellaneous, Ansari Bukhari, the subsidy does come with a condition being that machines purchased by the companies must be entirely assembled in Indonesia and with a minimum 40 percent local content (the GTA identified affected tariff line for sugar machinery is 8438). Under the scheme, the companies must first buy the new machines and then request reimbursement by the Industry Ministry, with validation by the Agriculture Ministry.
As the main purpose of this program is to reach self-sufficiency in the sugar sector, the affected trading partners are identified as the exporters to Indonesia of more than USD one million in trade value for at least one of the identified tariff lines.