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)