RI's THC 75% higher than neighboring countries<\/p>\n
Abdul Khalik
\nThe Jakarta Post
\nJakarta<\/p>\n
In its latest bid to bail out the country's troubled textile
\nindustry, the government has set up a task force, comprising the
\ngovernment and the business community, to identify problems in
\nthe industry and find solutions.<\/p>\n
The task force is headed by Ministry of Industry and Trade
\nRini Soewandi and the ministry's Directorate General of
\nInternational Trade, Sudar SA, who will work with top officials
\nfrom state-owned banks and the textile association. It will work
\nunder the supervision of the Coordinating Minister for the
\nEconomic Affairs Dorodjatun Kuntjoro-Jakti.<\/p>\n
The task force, formed last Friday during a meeting involving
\nofficials from the ministry, banking and textile industries, will
\nmeet once each week to detail all major problems and recommend
\nsteps to solving them.<\/p>\n
These steps are expected to enable the industry to compete
\nwith other exporting countries in the post quota era starting in
\nJanuary 2005 while achieving a target of 5 percent growth in
\ntextile exports in 2004.<\/p>\n
\"We expect everything -- from problem identification to the
\nissuance of governmental regulations to solve the problems -- to
\nbe completed before the establishment of the new government,\" the
\nIndonesian Textile Association's (API) chairman for Greater
\nJakarta, Benny Benyamin, told The Jakarta Post on Tuesday.<\/p>\n
Friday's meeting was held following the continued reluctance
\nof the banking sector to lend to the industry, which needs new
\nfunds to repair its outmoded machinery.<\/p>\n
Banks fear that textile firms are too high of risk, given the
\nnumerous problems, including the murky quota allocations by the
\ngovernment, and the tighter competition waged by competitors such
\nas China and Vietnam.<\/p>\n
Aside from quota allocations and outdated machinery, Benny
\nsaid the industry had become less competitive due to unfavorable
\ngovernment policies and the high terminal handling charges (THC)
\nat ports.<\/p>\n
Based on Decree No. 155\/2001 from the Ministry of Finance,
\ncotton was not officially a strategic commodity anymore, and the
\nimportation of cotton, the main raw material for fabric and
\ntextiles, now carries a 10 percent import duty.<\/p>\n
The duty affects the competitiveness of products from
\nIndonesia as 98 percent of the total amount of cotton used is
\nimported while most textile importing countries, such as China
\nand Vietnam have no duties on cotton imports.<\/p>\n
The decrease in Indonesia's total textile exports since 2001
\nshows the significant impact of the import duty policy. After the
\nexport value reached US$8.2 trillion in 2000, the export value
\nfell to $7.2 trillion in 2001, $6.8 trillion in 2002, and
\nslightly increased to $7.03 in 2003.<\/p>\n
Another burden is the taxes imposed on a factory which has a
\npower generator. Factories usually use their own generators to
\npreempt the frequent power failures, when relying on state-owned
\nelectricity firm PLN. However, aside from the monthly tax for
\nhaving a generator, factories are obliged to pay the so-called
\n\"tax on public road lighting\" (PPJU) despite the fact that they
\ndo not supply the electricity outside their compounds. The PPJU
\ntax ranges from 3 to 10 percent of electric use depending on the
\nprovince.<\/p>\n
Regarding THC, quoting reports from the Jakarta-Japanese Club,
\nBenny said Indonesia had the highest THC in Asia in the 2003-2004
\nperiod, about 75 percent higher than the region's average.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ris-thc-75-higher-than-neighboring-countries-1447893297",
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"sponsor": "Okusi Associates",
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