The Indonesian Filament Fiber and Yarn Producers Association (APSyFI) assesses that the government has several policy options for disbursing the US$6 billion (equivalent to IDR 101 trillion) planned to rescue the national textile industry. The effectiveness of this massive stimulus is considered highly dependent on regulatory readiness and ease of access for businesses.
APsyFI Chairperson Redma Gita Wirawasta stated that the machinery restructuring program is one of the schemes most readily available for immediate implementation. This is because the regulatory framework for reconstruction is already in place, and the industry has experience accessing similar programs in the past. Under these conditions, the implementation of the targeted policy can be accelerated.
However, Redma emphasized that machinery modernization cannot stand alone without other supporting policies. He stated that strengthening the textile industry's competitiveness requires a more comprehensive approach, particularly to strengthen the domestic upstream industry.
In addition to machinery restructuring, APSyFI is encouraging stimulus programs based on increased domestic raw material consumption. One option deemed effective is providing tax incentives that can directly reduce industrial production costs. Another scheme being considered is implementing a government-borne value-added tax (VAT) on the purchase of domestic raw materials.
Redma believes that such incentives will not only ease production costs but also encourage the absorption of national upstream industry products. This way, the integration of the textile supply chain, from the fiber sector to the finished product, can be sustainably strengthened.
On the other hand, energy costs remain a major challenge weighing on the competitiveness of the textile industry. Therefore, stimulus in the electricity sector is considered capable of having a rapid impact on the production cost structure. According to Redma, policies such as electricity tariff discounts or adjustments to the peak load coefficient (WBP) borne by the government are relatively easy to implement.
However, APSyFI cautioned that the distribution of the Rp101 trillion stimulus should not repeat the pattern of past policies that yielded minimal results. Redma cited the example of the government disbursing approximately Rp3.5 trillion for interest subsidies for machinery restructuring between 2007 and 2016. Despite this, the textile industry remains under pressure due to the influx of dumped imported products and the proliferation of illegal goods.
According to him, the large amount of stimulus funds demonstrates the government's serious attention to the textile industry. The main challenge lies in implementing policies so that the industry can truly benefit. He cautioned against any stimulus schemes that are difficult to implement, making businesses reluctant or even unable to access them.
Furthermore, Redma emphasized that all stimulus schemes must be accompanied by trade policies that create fair business competition. Furthermore, the stimulus must be directed at encouraging the transformation of the textile industry toward a green industry based on Industry 4.0 technology, and strengthening product innovation to ensure competitiveness in the global market.
Previously, the government announced plans to disburse US$6 billion (approximately Rp101.28 trillion) to protect the domestic textile industry. Coordinating Minister for Economic Affairs Airlangga Hartarto stated that this policy was a direct directive from President Prabowo Subianto to maintain the sustainability of labor-intensive sectors.
Airlangga emphasized that the government is not only focused on the growth of capital-intensive sectors but is also committed to maintaining labor-based industries. According to him, the fund is being prepared to ensure the textile industry maintains competitive technology and is able to ward off malicious investment.
He stated that the national textile industry currently employs around 5 million workers. Given the size of the domestic market, this number has the potential to increase to 7 million if the textile industry is maintained and developed sustainably.