JAKARTA: Businesses have expressed concern over a boycott on goods from companies perceived to support Israel, arguing the measure hurt retail sales and may jeopardise the country’s economic growth target.
Indonesian Employers Association (Apindo) chairwoman Shinta Kamdani said the boycott had wrongly targeted some local companies with no connection to Israel.
To prevent that, the association would release a list of products from manufacturers that were really affiliated with the Middle Eastern country.
“We will gather accurate data, so people can know whether a company that is claimed (to be affiliated with Israel) really has a connection or not,” Shinta said on Wednesday (Nov 29), as quoted by Kompas.
According to her, the list supports Fatwa No. 83/2023 from the Indonesian Ulema Council (MUI) on supporting Palestine through a boycott of products from pro-Israel firms. The fatwa itself contains no list of brands or products that should be boycotted.
Shinta named PT Unilever Indonesia as one of the firms wrongly targeted by the boycott. The major fast-moving consumer goods (FMCG) manufacturer had no affiliation with Israel, she stated, noting it was a locally registered company since 1980.
If the boycott persisted, the company may need to reduce production and cut its local workforce, she added.
“It is a pity for the consumers who do not understand, and thought that these products were affiliated with Israel and support Israel’s aggression (against Palestine). Thus, we need to know where products come from before conducting a boycott,” Shinta said.
Separately, Indonesian Retail and Tenants Association (Hippindo) chairman Budihardjo Iduansjah said another local company that had become a victim of the boycott was PT Fast Food Indonesia, operator of Kentucky Fried Chicken (KFC) outlets in the country.
Quoted in the same Kompas article, he stressed that the restaurant chain employed local people and sourced raw materials like chicken, rice and vegetables from within the country.
The Indonesian Chamber of Commerce and Industry (Kadin) also stated that the boycott had resulted in losses for local companies over allegations that they were affiliated with parties involved in the Palestine conflict.
Thus, the government needed to take action to “protect the national interest” and create a conducive business climate.
“We also suggest that customers respond wisely to circulating information, carefully choose accurate news sources and not get trapped in hoaxes, which would create losses for (certain) companies and affect thousands of employees working there,” Yukki Nugrahawan Hanafi, Kadin’s acting chairman, said in a statement on Nov 30.
MUI fatwa head Asrorun Niam Sholeh said if a company was wrongly accused of being a supporter of Israeli aggression, it could make a public declaration and provide some proof.
“Don’t let the wrong company be punished with the justification of a fatwa,” he urged in a video interview with TV One on Nov 29.
According to Asrorun, to ascertain whether a company supported Israel or not, consumers could check its financial statements and comments from board members as well as news reports or studies from legitimate organisations.
In a statement on its Instagram account, the MUI said losses or layoffs at companies supporting Israel were not the purpose of the fatwa, though they could serve to pressure a business into ending support for Israel. Blame for losses should be laid at the company’s or the global parent company’s managers for deciding to support Israel’s aggression.
“Don’t twist (the narrative) by portraying the MUI’s fatwa as the cause of losses or job cuts,” the Ulema council said in a statement.
Roy Mandey, chairman of the Indonesian Retailers Association (Aprindo), said he had heard about the idea of issuing a blacklist of Israel-related products. However, he opined that the list would not be released soon, as there needed to be some “compromise” regarding companies named on the list.
“Products [that should be boycotted] are those produced in Israel. For products that are manufactured here, have received a halal licence, employ local people and pay taxes, I think we should not boycott them,” Roy said on Nov 29.
Roy explained that, following the boycott call, retail sales had dropped significantly, especially for FMCG products.
Continuing the boycott may result in a loss of economic growth, according to Roy. Indonesia’s GDP growth came in at 4.9 per cent year-on-year in the third quarter. The government has a full-year target of growth above 5 per cent. Roy opined that growth may drop to 4.8 or 4.7 per cent amid weaker consumer spending.
He suggested the government respond swiftly to the retail sales drop by providing fiscal incentives or salary subsidies for retailers.
“We cannot let the situation remain as it is. The speed to respond to the trend is so important,” Roy said. - The Jakarta Post/ANN