GATT principles will affect Indonesian economy: Minister<\/p>\n
JAKARTA (JP): A minister warned yesterday that the new
\nprinciples of the General Agreement on Tariffs and Trade (GATT)
\nwill affect Indonesia's economy, which is not ready to face
\nfierce competition through trade liberalization.<\/p>\n
\"Some of our industries, such as textile manufacturing, are
\nfootloose while others with comparative advantages, like the
\nforest-based industry, are facing non-tariff barriers in other
\ncountries,\" State Minister of National Development Planning
\nGinandjar Kartasasmita said in a seminar here.<\/p>\n
He explained that many Indonesian industries are footloose
\nbecause they are too concentrated on the downstream level and are
\nnot well supported by upstream industrial facilities.<\/p>\n
As a result, these industries will have difficulty competing
\nwith products from industrial countries that already have
\ndeveloped upstream industries, most of which are protected
\nstrongly by their governments, he said.<\/p>\n
He said Indonesia cannot protect its infant upstream
\nindustries heavily because the present era of liberalization
\ncalls for a reduction of trade barriers.<\/p>\n
Ginandjar, who is also chairman of the National Development
\nPlanning Board (Bappenas), said that the country's forest-based
\nindustry has competitive advantages on the international market
\nbut that importing countries tend to protect their domestic
\nindustries through such non-tariff barriers as environmental
\nstipulations.<\/p>\n
He reiterated that now was the time for Indonesian industries
\nto foment downstream activities and that it was critical not to
\nfall behind neighboring countries that have also actively
\npromoted upstream industries in anticipation of the inevitable
\nglobal competition in the new economic liberalization era.<\/p>\n
APEC<\/p>\n
Hadi Soesastro, executive director of the Centre for Strategic
\nand International Studies (CSIS), told the seminar of the impact
\nof international economic developments on Indonesia's own
\neconomy, saying that the country's businessmen are not prepared
\nwell enough to face the trade liberalization that will likely be
\nadopted by the Asia Pacific Economic Cooperation (APEC).<\/p>\n
APEC's 17 members are scheduled to hold their second
\nleadership meeting in Indonesia in November to work out plans to
\nliberalize trade among themselves by the year 2020.<\/p>\n
\"I have never seen an initiative, for example, to gather
\npolicy makers, economists and businessmen at a same table for
\ndiscussions on APEC and all of its consequences,\" Hadi said.<\/p>\n
Bimantara Group's executive director, Peter F. Gontha, one of
\nthe panelists at yesterday's seminar, concurred that Indonesian
\nbusinessmen are not ready to compete with their regional
\ncounterparts in the Asia-Pacific market, due to an absence of
\nclose cooperation between conglomerates and smaller businesses.<\/p>\n
Regardless, Ginandjar said that Indonesia cannot possibly
\nretreat from world competition.<\/p>\n
Instead, Indonesia should take steps to face the challenges by
\nintroducing various measures, including the continuation of
\nderegulation, the improvement of the human resources, the
\nstrengthening of economic institutions, the improvement of
\nresearch and development activities and the introduction of
\nselective government interventions. (fhp)<\/p>",
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"sponsor": "Okusi Associates",
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