New import policies to protect industries fruitless, experts say<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
New measures to protect local industries with tighter import
\npolicies have won praise from industry players, but experts doubt
\ntheir effectiveness and said the government should instead help
\nindustries reduce their inefficiencies.<\/p>\n
Unless the government takes concrete action to help rejuvenate
\nlocal industries and make them more efficient and competitive,
\nall the protective measures will be in vain, the experts said.<\/p>\n
"We are allowed to take protective measures for ailing
\nindustries, but it will all be fruitless if there is no concrete
\naction to rejuvenate the industries," Pande Radja Silalahi,
\neconomist at the Centre for Strategic and International Studies
\n(CSIS), told The Jakarta Post over the weekend.<\/p>\n
In a bid to curb the influx of imported goods into the
\ncountry, the Ministry of Industry and Trade has issued several
\ndecrees over the last three months to raise import tariffs on
\nsugar, steel and polypropylene, and to limit the number of
\nimporters of textile, steel and sugar by barring nonproducers
\nfrom importing the goods.<\/p>\n
The latest move by the ministry was to propose President
\nMegawati Soekarnoputri sign a presidential decree on safeguard
\nmeasures. The ministry has sent the draft decree to Megawati and
\nthe President is expected to sign it sometime this month.<\/p>\n
Under the safeguard measures, which are allowed by the World
\nTrade Organization (WTO), the government can impose higher import
\nduties on certain products on a temporary basis if imports enter
\nthe country in such numbers and so quickly that they threaten the
\nsurvival of local industries.<\/p>\n
Almost all WTO members have such a safeguard regulation.<\/p>\n
Pande said all the protective measures, including the
\nsafeguard action, were merely short-term solutions, and that the
\ngovernment should create policies that will empower local
\nindustries for the long term.<\/p>\n
Industry players have long complained about unnecessary and
\noften illegal fees imposed on them, which have become worse with
\nscores of overlapping tax regulations since the implementation of
\nregional decentralization last year.<\/p>\n
Industries that need restructuring so that they can remain
\ncompetitive face a barely recovering banking sector, which is
\nreluctant to lend. In addition, capital from other sources is
\nhard to come by, amid a poor investment climate and a private
\nsector crippled by a mountain of bad debts.<\/p>\n
Pande also called on the government to be careful in selecting
\nindustries worth protecting. "We don't need to protect
\ninefficient industries such as sugar," he said.<\/p>\n
Ine Minara Ruki, economist at the University of Indonesia,
\nsaid the government had taken measures to protect several
\nindustries without understanding their true situations.<\/p>\n
Ine urged the government to establish clear criteria for which
\nindustries and commodities deserved protection.<\/p>\n
"Each industry has different problems, so the government must
\nstudy the performance of industries and commodities before
\nimposing protective measures," Ine told the Post.<\/p>\n
However, Indra Ibrahim, executive director of the Association
\nof Indonesian Textile Producers, hailed the government's new
\nprotective policies, and expressed hope the safeguard mechanism
\ncould be implemented as soon as possible for the textile
\nindustry.<\/p>\n
"The safeguard mechanism will be very effective in helping to
\nreduce the influx of cheaper imported textile products,
\nespecially from China," Indra said.<\/p>\n
Textile players have long complained that cheap imports are
\ncutting into their earnings.<\/p>\n
Farukh Bakri, chairman of the Indonesian Sugar Association,
\nblasted the government's sluggishness in introducing the
\nsafeguard mechanism to protect the local sugar industry.<\/p>\n
"We need protection, as do other countries. Indonesia is one
\nof the countries with the lowest import duty," Farukh said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-import-policies-to-protect-industries-fruitless-experts-say-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}