[Ferro-Alloys.com] The Indonesian Government on May 11 released a regulation on an economic recovery programme worth 318 trillion Rp (21.28 billion USD) which focuses on capital injections for State-owned enterprises and loan subsidies for small businesses, among others.
Under Government Regulation (PP) No. 23/2020 which took effect on May 11, the government will carry out efforts to support the recovery of the COVID-19 - battered economy.
According to the Jakarta Post, over 152 trillion Rp will be allocated for SOEs, with 8.5 trillion Rp for the national flag carrier Garuda Indonesia, 3 trillion Rp for steelmaker PT Krakatau Steel and 13 trillion rupiah for the State Logistics Agency (Bulog).
The funds for the SOEs will also be channelled to state-owned oil giant Pertamina (48.25 trillion Rp) and electricity company PLN (45.42 trillion Rp) in the form of accelerated compensation payments.
The regulation also regulates that the government can place funds with certain interest rates at domestic banks, which provide loan restructuring and disburse additional loans to businesses to provide more liquidity to the banks, or make long-term investments in stocks, debt papers and/or direct investment to gain economic, social and other kind of benefits. It is also allowed to give financial guarantees, both directly and indirectly, to businesses impacted by the outbreak.
The government can also provide loan interest subsidies for micro, small and medium enterprises (MSMEs) using state funds, according to the regulation. Around 34.15 trillion Rp will be set aside for this purpose./.VNA
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