Govt plans to force local companies to compete globally<\/p>\n
By Riyadi<\/p>\n
MENDOZA, Argentina (JP): Indonesian Minister of Industry and
\nTrade Tunky Ariwibowo promised Friday to reduce protection levels
\nin the domestic market to force local companies to compete with
\nforeign firms both at home and internationally.<\/p>\n
\"The problem with our companies is that they are very much
\nintoxicated by our large (protected) domestic market,\" Tunky told
\njournalists aboard an aircraft flying him from Mendoza to Buenos
\nAires.<\/p>\n
The minister went to Mendoza, some 1,000 kilometers west of
\nBuenos Aires, to visit the IMPSA industrial estate. IMPSA is one
\nof the world's leading producers of capital goods, especially
\npower turbines.<\/p>\n
Tunky acknowledged that although some 50 percent of
\nIndonesia's tariff lines are already in the zero to 5 percent
\nbracket, some other industries are still so well protected that
\ncompanies working in the protected areas are uncompetitive.<\/p>\n
\"There is no other way to force them to go global except by
\nreducing the protection level (in the domestic market) through
\ntariff reductions,\" Tunky added without elaborating what the
\nprotected sectors are.<\/p>\n
Chairman of the Indonesian Chamber of Commerce and Industry
\nAburizal Bakrie, who accompanied Tunky on his visit to Mendoza,
\nsupported the minister's argument, saying Indonesian businessmen
\nare so domestic market-oriented that they are reluctant to
\ncompete in export markets.<\/p>\n
\"If we remain like this, we will continue to be left behind by
\nour neighbors, especially Malaysia and Thailand,\" Aburizal said,
\nadding that both neighboring countries entered the \"forgotten\"
\nmarkets of Africa and Latin America many years ago.<\/p>\n
Malaysia, through the Malaysia Air System, has opened direct
\nflights from Kuala Lumpur to Johannesburg and Buenos Aires. It
\nhas invested in cattle breeding here. It has also won a contract
\nto build a toll road in Buenos Aires. It has even expanded its
\ntrading wing to Uruguay, by building a trading house there.<\/p>\n
Aburizal called on Indonesian businesspeople to continue
\nseeking business opportunities in non-traditional markets,
\nespecially in Latin America, eastern Europe, the Middle East and
\nAfrica, to open ways for Indonesia's exports.<\/p>\n
\"Investing abroad should not be considered as capital flight
\nanymore but rather a way to open foreign markets for Indonesia
\nexports,\" Aburizal said.<\/p>\n
Tunky also called on Indonesian exporters to look into
\npossibilities of exporting their products to non-traditional
\nmarkets because Indonesia's traditional markets have become
\nincreasingly saturated with its traditional export goods such as
\ntextiles and textile-related products, wood products, leather
\ngoods, footwear and electronics.<\/p>\n
\"Our traditional markets have been Japan, the United States
\nand Europe. But I think you should not forget the markets of
\ndeveloping countries in Latin America, like Argentina, which also
\nhave a high economic growth policy,\" Tunky said.<\/p>\n
The minister is here leading an Indonesian economic mission to
\nLatin American countries, including Argentina, Brazil and Mexico,
\nto pave the way for Indonesian exporters to penetrate the market.
\nYesterday, Tunky, accompanied by 40 businesspeople, left Buenos
\nAires for Sao Paulo on a two-day mission to Brazil.<\/p>\n
Capital goods<\/p>\n
During his visit to Mendoza, Tunky met with the shareholders
\nand executives of IMPSA and played golf with them. Tunky said
\nthat he had invited IMPSA executives to cooperate with Indonesian
\nfirms to develop the capital goods industry in Indonesia.<\/p>\n
He said Indonesia, whose economy is growing by more than 7
\npercent per annum, is a fertile market for capital goods. Almost
\none third of Indonesia's imports are capital goods.<\/p>\n
Indonesia, Tunky said, will continue opening its market for
\ncapital goods to satisfy the growing domestic needs.<\/p>\n
Aburizal said Argentina's advanced capital goods industry can
\ncontribute to the development of the industry in Indonesia and
\nthe other members of the Association of Southeast Asian Nations
\n(ASEAN) -- Brunei, Malaysia, the Philippines, Singapore, Thailand
\nand Vietnam.<\/p>\n
Aburizal, also chairman of the ASEAN Chamber of Commerce and
\nIndustry, said that the private sector from the ASEAN countries
\nare sounding out cooperation in the production of capital goods.<\/p>\n
Tunky said the ASEAN governments, through the ASEAN economic
\nministers meeting in Jakarta earlier this month, have supported
\nsuch cooperation in the production of capital goods.<\/p>\n
He said the ASEAN governments' support will be in the form of
\nprocurement because they remain the largest buyers of capital
\ngoods in the region.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-plans-to-force-local-companies-to-compete-globally-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}