Government to protect trade against slump<\/p>\n
Berni K Moestafa, The Jakarta Post, Jakarta<\/p>\n
Local trade organizations urged the government to raise import
\ntariffs in anticipation of a global recession, just as Indonesia
\nis preparing to open trade in line with next year's
\nASEAN Free Trade Area (AFTA).<\/p>\n
The National Economic Recovery Committee (KPEN) warned on
\nThursday of cheap imported products flooding the market here,
\nonce global recession started to pinch Indonesia's neighboring
\neconomies.<\/p>\n
The government is too preoccupied with its (2002) budget
\ndraft... . I don't think it realizes the seriousness of the
\nsituation developing outside,\" KPEN chairman Sofyan Wanandi said
\nat a media meeting.<\/p>\n
Last month's terrorists attacks in the U.S. dealt a severe
\nblow to world economies already reeling from a slump in the U.S.
\nmarket.<\/p>\n
While analysts estimate that Japan has slid into recession,
\nwith the U.S. likely to follow, they said Indonesia had yet to
\nfeel the worst of this downturn.<\/p>\n
The Indonesian Textile Association (API) predicts a 30 percent
\ndrop in exports for next year from an estimated US$8 billion this
\nyear.<\/p>\n
Meanwhile, the Indonesian Electronic and Electrical Home
\nAppliances Industries (GABEL) predicted a drop of 20 percent to
\n25 percent haunting next year's export revenues.<\/p>\n
Sofyan said foreign investment and loans would drop as well.<\/p>\n
International Monetary Fund (IMF) senior representative David
\nNellor advised Indonesia to fortify its economy against a drop in
\nforeign investment.<\/p>\n
Finance Minister Boediono concurred, but cited political
\nstability and security as preconditions. He ruled out applying
\nnew policies to stimulate domestic growth.<\/p>\n
Boediono also rejected calls to revise assumptions for the
\n2002 state budget draft following the unexpected global downturn.<\/p>\n
KPEN chairman Sofyan criticized this persistence as flying in
\nthe face of reality.<\/p>\n
\"Every country out there is scrambling to save its economy,
\nlet's do what we can do to save ours.\"<\/p>\n
\"We think this is going to be a short-term crisis ... so we
\nneed short-term measures to cope with it,\" Sofyan continued.<\/p>\n
He said the government had to introduce an emergency package
\nto mitigate the impact of a global recession.<\/p>\n
The government, he said, should ban products suspected of
\nbeing dumped, and raise import tariffs on vital commodities.<\/p>\n
\"You have to clear imports of dumping and illegal products
\nright away; the emergency situation calls for quick measures,\" he
\nsaid.<\/p>\n
But that could prove difficult, with the implementation of
\nAFTA next year, under which Indonesia must lower import tariffs
\nfor certain products to a maximum of five percent.<\/p>\n
According to the Indonesian Chamber of Commerce and Industry
\n(Kadin), local companies are not ready for AFTA next year.<\/p>\n
Kadin chairman Aburizal Bakrie said the government should
\nconsider exempting several industries deemed too weak to compete.<\/p>\n
\"There should be a temporary, exclusive list for companies to
\ncope with AFTA,\" he said.<\/p>\n
Separately, economist Bustanul Arifin of the Institute for
\nDevelopment of Economics & Finance (Indef) said trade protection
\ncaused distortion in an economy.<\/p>\n
\"Basically, it (protection) favors a few at the expense of the
\nmany,\" he said.<\/p>\n
Raising import tariffs would not only burden consumers, it
\nwould also add to inflationary pressures, he warned.<\/p>\n
Instead of trade protection, he said, the government should
\nhelp exporters penetrate new markets to offset the decline in
\ntraditional ones, like the U.S. and Japan.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-to-protect-trade-against-slump-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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