RI's textile industry may collapse by 2005: Association<\/p>\n
Antara, Jakarta<\/p>\n
Indonesia's textile industry may collapse, especially after
\nthe abolishment of the quota system in January 2005, if the
\ngovernment fails to create a climate in which the industry can
\ncompete in the domestic and overseas markets, an industry
\nspokesman said.<\/p>\n
"If the situation continues to deteriorate, the textile
\nindustry will collapse by 2005. This will especially happen to
\nexport-oriented industries producing the same goods as their
\nforeign competitors," chairman of the Indonesian Textile
\nAssociation (API) Benny Soetrisno said here Wednesday.<\/p>\n
Currently, Benny said, the textile industry had to bear an
\nincreasing burden from illegal levies and taxes as well as new
\nlegal levies as a consequence of regional autonomy.<\/p>\n
The situation was compounded by an unfavorable business
\nclimate marked by high interest rates, lack of trade financing
\nfacilities, stagnation in capital restructurization, increasing
\nminimum wages, labor unrest, and the increasing cost of energy
\nand infrastructure, he said.<\/p>\n
"Those factors have affected the competitiveness of export-
\noriented industries. An API survey has shown that the business
\nclimate in Indonesia is not as good as in our potential
\ncompetitors such as China, Vietnam, and Thailand," Benny said.<\/p>\n
As a result, textile exports had been declining significantly
\nsince the economic crisis hit Indonesia in mid 1997.<\/p>\n
In 1998, textile exports declined by 0.07 percent to US$7.433
\nbillion from $7.438 billion in 1997.<\/p>\n
The exports plunged in 1999 to $2.279 billion but then sharply
\nincreased to $8.377 billion in 2000.<\/p>\n
In 2001, the commodity's export dropped by 24.74 percent to
\n$6.304 billion.<\/p>\n
According to Benny, at least 40 textile companies were running
\nat a financial loss while 76 others were unable to conduct their
\nactivities normally.<\/p>\n
"As many as 76 factories have closed down. Some of them
\npossibly relocated to other countries because of heavy burden
\nthat have to be borne at home," he continued.<\/p>\n
The textile industry is facing serious difficulties due to
\nunfavorable business climate in Indonesia, he said.<\/p>\n
Unfortunately, instead of making concrete efforts to improve
\nthe situation, some related institutions were involved in
\nsmuggling, increasing port and transportation fares, and other
\nactivities which could lead to the collapse of domestic industry,
\nBenny said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ris-textile-industry-may-collapse-by-2005-association-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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