Textile exports need push<\/p>\n
JAKARTA (JP): President Soeharto Saturday instructed
\ngovernment institutions and the private sector to close ranks and
\ntake measures to improve Indonesia's competitive edge in textiles
\nand textile products on the world market.<\/p>\n
"The government will continue introducing deregulatory
\nmeasures and will simplify procedures...while textile producers
\nshould improve efficiency," he said at the opening of the seventh
\ncongress of the Indonesian Textile Association at the State
\nPalace here.<\/p>\n
He warned that next year's implementation of the new General
\nAgreement on Tariffs and Trade (GATT) and gradual trade
\nliberalization in the Asia-Pacific region will sharpen
\ncompetition while offering new opportunities.<\/p>\n
New producers have emerged among developing countries, while
\nindustrialized countries are making their textile products more
\ncompetitive, thereby creating fiercer competition on the world
\nmarket, Soeharto said.<\/p>\n
"We, therefore, have no other alternative but to work as hard
\nas possible to make our products highly competitive," he said.<\/p>\n
If Indonesia's textile industry has an edge, its economy will
\ngrow faster. Otherwise, the country will face serious problems,
\nhe added.<\/p>\n
Indonesia, together with the five other members of the
\nAssociation of Southeast Asian Nations (ASEAN), has been
\ncommitted to liberalizing its trade by 2003. The Asia Pacific
\nEconomic Cooperation (APEC) forum, of which Indonesia is a
\nmember, also decided in the middle of this month to liberalize
\ntrade among its 18 members by 2010 for its developed members and
\nby 2020 for its developing members.<\/p>\n
The president suggested that textile producers build up their
\ncompetitive advantage by working more profoundly with the
\ngovernment, restructuring their industrial facilities and
\navoiding unhealthy competition among themselves.<\/p>\n
Direction<\/p>\n
He promised that the government would give clear direction on
\nits policies and would continue deregulating and removing
\nbureaucratic hurdles.<\/p>\n
Soeharto admitted that textile and textile-related products
\nhave contributed a large portion to the country's exports since
\n1989, nearly 16 percent.<\/p>\n
According to the Central Bureau of Statistics, textile
\nexports, which contributed over US$6 billion to the country's
\ntotal exports in 1993, have grown by an annual average of 34.4
\npercent annually since 1989, as compared to the average growth of
\n20.5 percent in total non-oil exports.<\/p>\n
However, the pace of textile export growth slowed down during
\nthe first semester of this year, when textile exports declined by
\n8.5 percent to $3.3 billion from the same period of last year.<\/p>\n
In a hearing with Commission VI of the House of
\nRepresentatives last week, textile producers complained that
\ntheir products have lost their competitive edge on international
\nmarkets due to their high production costs.<\/p>\n
Factors contributing to the high costs include rises in
\nelectricity billing rates, high interest rates, increasing labor
\nwages as well as hikes in the prices of raw materials.<\/p>\n
Handoko Tjokrosaputro, of the textile association, told
\njournalists Saturday that long procedures for the withdrawing of
\nvalue added tax (VAT) have also affected the production costs.<\/p>\n
The government has promised to reimburse the VAT to exporters
\nwithin one month. However, according to Syafioen of PT Great
\nRiver Industries, the time for reimbursement very often exceeds
\none month, and a number of exporters even have to wait for a year
\nor two.<\/p>\n
Speaking at the two-day congress Saturday, Minister of Trade
\nSatrio B. Joedono promised that the government will simplify the
\nprocedure of the tax reimbursement. (rid)<\/p>",
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"sponsor": "Okusi Associates",
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