Protecting upstream industries<\/p>\n
Protection, in any form, negatively affects any effort to
\nstrengthen competition. Industrialists are less likely to promote
\nefficiency and professionalism if they are assured a captive
\nmarket. The higher the tariff protection an industry enjoys, the
\nmore difficult it will become and the longer it will take for the
\nindustry to adjust its competitive capabilities.<\/p>\n
In the case of PT Chandra Asri Petrochemical Center (PT CAPC)
\nthe problem is even more grave because it is an upstream
\nindustry. Any protection given to an upstream industry will
\naffect the price the product used by downstream industries. All
\ndownstream industries using PT CAPC products will be burdened
\nwith material costs higher than those of similar industries
\nabroad. These industries will encounter difficulties and may even
\nbe pushed out of the world market. The industries using PT CAPC
\nproducts are mostly textile industries, and textiles are among
\nour leading exports. Hence, national growth will be effected.<\/p>\n
Since they are unable to sell their products abroad, the
\ndownstream industries will concentrate on the domestic market,
\nforcing consumers to pay higher prices for textiles. This is
\ndespite the fact that national development efforts have worked to
\nguarantee adequate supplies of textiles.<\/p>\n
Many industries will be forced to close and dismiss their
\nworkers. To overcome their difficulties, downstream industries
\nmay in their turn ask for protection. Therefore, protecting
\nupstream industries slows down economic growth, lowers the level
\nof social welfare and constricts employment opportunities.<\/p>\n
It must be admitted that PT CAPC's investment level is very
\nhigh. Completion of the plant was delayed for three years while
\nturnout of its vitally important product fluctuated. At one
\npoint, it was threatened by the dumping practices of its
\ncompetitors. For these reasons, investment in the petrochemical
\nsector is usually protected during the initial stages.<\/p>\n
In considering the level and the duration of any protection
\nthat might be given to PT CAPC, attention should be paid to
\npublic interest and to downstream industries. In the final
\nanalysis, it is all in the national interest.<\/p>\n
-- Suara Karya, Jakarta<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/protecting-upstream-industries-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }