"The competitiveness of local products and companies will be negatively affected. A number of companies will make losses because of the hike," APINDO chairman Sofjan Wanandi said here on Monday.
"If the government raises the electricity tariff, a lot of companies will lay off many of their workers and outsource the jobs to contract workers. This would bring us back to the problems relating to the controversial outsourcing system," he stated.
Sofjan added that a lot of companies would reduce their workforce in order to increase production efficiency.
"It would seem that one of the solutions could be to increase the price of industry products," he noted.
"However, if the electricity tariff rises and the price of local products increase by 5 percent, the purchasing power of the public would also automatically be reduced," Sofjan explained.
He said the electricity tariff hike expected next year would burden the nation`s businesses and industries the most.
"The Indonesian government must consider the examples of many developed countries that impose a special electricity tariff on their manufacturing industries in an effort to boost product competitiveness," Sofjan pointed out.
"The purchasing power of the middle class has been rising and it would not be a big deal if they have to pay a little more for electricity," he stated.
Sofjan added that the government`s populist policies "unfairly burden" the country`s business community.