RI should brace for foreign retailers<\/p>\n
JAKARTA (JP): Liberalized trade in the region is likely to
\nforce Indonesia to open its doors to overseas retail chains by
\nthe year 2000, says a senior official.<\/p>\n
Hidayat, an advisor to the minister of cooperatives and small
\nenterprises, said that Indonesia and the Philippines are the only
\ncountries in East Asia barring direct foreign investment in
\nretail businesses.<\/p>\n
However, he said, \"the Philippines will open the sector in
\n1998. Indonesia will not be able to remain the only country with
\nsuch a policy, so the sector will be opened in the year 2000 at
\nthe latest.\"<\/p>\n
To strengthen domestic retailers, he suggested that the
\ngovernment prepare a regulation on retailing and distribution.<\/p>\n
\"If there is no legal foundation for the retail business, I am
\nconcerned about a possible free fight in the sector,\" he said
\nyesterday at a meeting of the Indonesian Retailers Association at
\nthe Holiday Inn.<\/p>\n
Based on the country's investment law, foreign investment
\ncompanies are prohibited from directly marketing their own
\nproducts in the country and from operating in the retail sector.<\/p>\n
However, many foreign retailers have entered the country
\nthrough franchise agreements with local companies. Foreign
\nparties are also indirectly involved in the retail business
\nthrough technical and management assistance.<\/p>\n
The government also needs to encourage the domestic
\ndevelopment of small and medium-scale enterprises.<\/p>\n
The association's chairman, J.A. Sinungan, said that the
\nassociation currently groups 182 large-scale shops and
\nsupermarkets, 3,855 medium-scale retailers and shopping centers
\nand 98,500 small-scale shops and kiosks.<\/p>\n
\"These figures represent only 30 percent of the country's
\ntotal retailers, including small-scale businesses,\" he said.<\/p>\n
He added that the number retail outlets operated by large-
\nscale companies increased 44 percent in the past five years from
\n393 outlets (operated by 121 firms) to 562 outlets (by 153
\nfirms), including 265 department stores (by 64 firms) and 296
\nsupermarkets (by 84 firms).<\/p>\n
\"Total revenues in this business increased from Rp 5.3
\ntrillion (US$2.27 billion) in 1994 to Rp 6.2 trillion in 1995 and
\nare expected to rise further to Rp 9.7 trillion in 1998,\"
\nSinungan said. (icn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-should-brace-for-foreign-retailers-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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