Fri, 12 Dec 2008
Foreign governments and businesspeople have been complaining about what they consider restrictive import barriers the Indonesian government has slapped on certain goods.

However, further analyses would show that what the Trade Ministry has been doing so far is mostly protecting the domestic market from dumped or smuggled goods as there is now a huge excess of manufacturing capacity in most countries due to the global economic downturn.

Since manufacturers in major exporting countries such as China, India and Vietnam are facing depressed demand in the United States, Europe and most other developed economies, they naturally seek other markets to absorb their surplus production.

Indonesia, which is still predicted to grow at least by 4.5 percent next year -- though down sharply from about 6 percent this year -- could become the target for foreign suppliers, given the large market potential market of its 230 million people.

As the risk of import smuggling and other practices of contraband trade have increased -- in view of the country's vast coastal areas and inefficient and corrupt customs service -- the government naturally has taken concerted efforts to protect domestic manufacturers from smuggled products.

In this context, for example, the Trade Ministry ruled last month that five categories of goods -- food and beverage, garments, electronic goods, shoes and toys which are already produced within the country -- can be imported only through five major seaports: Jakarta's Tanjung Priok, Medan's Belawan, Semarang's Tanjung Emas, Surabaya's Tanjung Perak and Makassar Port.

The government even plans to hire Swiss Societe General de Surveillance to make preshipment inspections of these goods before they are shipped to the five Indonesian ports to ensure that these imports fully abide by all regulations, especially those regarding quality standards, duties and taxes.

None of these measures contravene the Geneva-based World Trade Organization rules.

Such additional measures are deemed most imperative now because of the country's high vulnerability to import smuggling and the corrupt and grossly inefficient customs service at smaller seaports across the vast archipelago.

The government has also strengthened the enforcement of the regulations on the implementation of Indonesian National Standard (SNI) requirements on particular industrial products such as steel, tires and packaged goods.

Lack of supervision had previously weakened the enforcement of these standards. Now that they are being implemented through more forceful manners to protect both domestic producers and consumers, to overseas suppliers and exporters they appear to be a new form of trade barrier.

New SNI measures include stricter anti-dumping policies, a greater requirement for Indonesian language ingredient labels on food and beverage products and the requirement of Indonesian language user manuals for electronic devices such as mobile phones and radios.

Unfortunately, the initial enforcement of the new measures unintentionally caused a temporary disruption in the supplies of certain foreign food products because smuggling was minimized and legal importers and distributors were still making adjustments to meet the new quality-standard requirements.

This disruption has caused widespread complaints among the expatriate community and foreign restaurant owners who found it increasingly difficult to obtain their favorite ingredients or fresh or packaged food.

This temporary negative impact gave the impression that the government was erecting a massive protectionist wall against imports, while simply better policy coordination among the Trade, Industry and Health Ministries could immediately remove the supply problem.

Likewise, the government's plan to scrap import duties on industrial materials which are not yet made locally or not adequately available should not be seen as a subsidy to Indonesian exporters. Such a measure is needed to strengthen the competitiveness of domestic manufacturers amid the global economic slowdown.

The government, however, is well advised to realize that while curbing unnecessary imports is required to protect the domestic industry and safeguard the balance of payments, that is not enough.

Significant improvements in logistical arrangements -- low transport costs, efficient port handling, short transit times, reliable delivery schedules and careful handling of goods in cold storage chains -- are vital for bolstering the competitiveness of our manufacturing industries.


Fri, 12 Dec 2008
From: JakChat
Comment by Roy's Hair
"Protect the domestic industry". I still don't get it. As far as I'm aware there is no domestic industry in Cabernet Sauvignon, Camembert cheese and Pate de Foie Gras.


Fri, 12 Dec 2008
From: JakChat
Comment by Vulgarian
Cap Orang Tua, Qeju and rendang cincang?


Fri, 12 Dec 2008
From: JakChat
Comment by chewwyUK
don't forget the Vodka RH



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