Analysts welcome the government's new reforms
Analysts welcome the government's new reforms
JAKARTA (JP): Economic analysts and industrialists have
welcomed the government's new deregulatory measures although many
of them doubt the effectiveness of the new move, intended to prod
the development of domestic industries.
"I personally greeted the government's new reforms because it
reflects Indonesia's commitment to support the General Agreement
on Tariffs and Trade (GATT) and the Asia Pacific Economic
Cooperation (APEC)," vice chairman of the Indonesian Economists
Association (ISEI), Dorodjatun Kuntjoro-Jakti, told reporters
here last night.
"I should stress that deregulatory measures are a must for all
countries to help face the era of the economic liberalization,"
he said.
Meanwhile, ISEI's chairman Marzuki Usman noted that Indonesia
is now in a race with China, Vietnam and Bangladesh to gain
market shares in the era of liberalization.
Rizal Ramli, managing director of an advisory group on
economics, industry and trade, Econit, concurred that the new
policy package is a positive step to foster economic efficiency.
"But it doesn't seem strong enough to anticipate the fierce
competition introduced by GATT," he argued.
The government Monday introduced new measures which reduced
import duties on 739 kinds of goods, removed non-tariff barriers
on 27 products in the industrial, agricultural and health sectors
and the removed import surcharges from 108 other items. The
measures, however, raised import duties on 38 tariff codes for
alcoholic products.
Automotive
Chairman of the association of Indonesian automotive
manufacturers, Herman Z. Latief, also greeted the newly
introduced measures, saying that the move will prod the
efficiency of the domestic automotive industry.
However, he cautioned that the new reduction of duties on
imports of assembled passenger cars will likely hit assembling
companies hard.
Monday's measures allow a 25-percent reduction of duties on
assembled passenger cars and vans and another 10-percent cut in
duties on semi-trailer spare parts.
"The automotive industry will face serious difficulties,
considering that most of automotive workers are now involved in
assembling business," Latief said as quoted by Antara news agency
here yesterday.
He suggested that the reduction in import duties should have
been eligible both for assembled vehicles and components.
With the new measures, imports of assembled cars whose models
have been assembled in the country are subject to a 175 percent
duty, as compared to 200 percent previously and a surcharge of
100 percent.
An economic observer, Hartojo Wignjowijoto, said that the
prerequisite of the success of the new measures is the
development of infrastructure in all provinces. "Thus far, the
deregulation packages have not been effective in reducing
production costs because of ignorance of infrastructure
development," he said.
A timber baron, Muhammad "Bob" Hasan, told Business Indonesia
that the deregulation should be followed by an alleviation of
illegal levies and the streamlining of the licensing bureaucracy.
(fhp/09)