ANNOUNCEMENT 30 Nov 2010

In November 2010, the government of Indonesia announced a change in production support.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



Regulation 123/M-IND/PER/11/2010 (in Bahasa Indonesia):
http://regulasi.kemenperin.go.id/site/baca_peraturan/721
Secondary Source on programme's length until 2015 (in Bahasa Indonesia):
http://economy.okezone.com/read/2010/03/23/320/315423/revitalisasi-mesin-industri-berlanjut-hingga-2015


Inception date: 01 Jan 2011 | Removal date: 31 Jan 2012
Still in force

Production subsidy

On 30 November 2010, the Indonesian Ministry of Industry issued regulation 123/M-IND/PER/11/2010 concerning an "industry revitalisation and growth programme through the restructuring of machines/equipment of the textile and footwear industries" (own translation of the regulation title).
In essence, the regulation merges two separate revitalistion programmes for the textile and footwear industries (cf. Related Measures). Similarly to the previous programmes, the state aid will be given through a 10%-reimbursement of the costs of new machines / equipment purchased by the companies. If the entities use only local machines, the reimbursement is raised to 15% and the following to requirements no longer apply:

  • a minimum machine / equipment investment of 500 million IDR (on the inception day 66'915 USD) for the textile industry and 250 million IDR (33'457 USD) for the footwear industry;
  • a maximum subsidy of 5 billion IDR (669'153 USD) per year for each company.

The regulation came into force on 1 January 2011 and was replaced by regulation 15/M-IND/PER/2/2012 on 15 February 2012. According to media reports, the programme shall last until the end of 2015.
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. The subsidy recipient produces internationally tradable goods. On this metric, the state aid proposed here is discriminatory.