Apindo Urges Government to Ease Raw Material Imports for Export-Oriented Industries

The Indonesian Employers’ Association (Apindo) is urging the government to provide easier access to raw material imports, particularly for export-oriented industries. This step is considered crucial to maintaining manufacturing sector productivity amidst the challenges of a weakening rupiah.

Apindo’s Head of Employment, Bob Azam, stated that while the government is trying to maintain a trade surplus to stabilise the exchange rate, such policies must not hinder the availability of industrial raw materials. According to him, obstacles to raw material imports could become a boomerang for the country’s foreign exchange earnings.

“We also understand that we are currently facing a weakening rupiah. One way to control the weakening rupiah is to maintain a surplus. But don’t let the effort to maintain a surplus result in raw material imports being held back,” Bob said when met at the Apindo office in Jakarta on Tuesday (23/6).

Bob emphasised that export-oriented industries play a vital role in generating foreign exchange. If the raw material import process is made difficult, industries will lose their productivity momentum and fail to meet global market demand.

He added that complaints about the difficulty of obtaining imported raw materials are already being felt by industry players. In fact, if these raw materials are processed and re-exported, their added value would greatly help strengthen the national foreign exchange reserves.

“If they can import raw materials and then export, why not? It has become a complaint from the industry now that importing raw materials is difficult. We understand it’s because we are maintaining the exchange rate, but if the import is for export purposes, it should be prioritised,” he stressed.

As a concrete solution, Apindo is currently working with the Ministry of Finance through a debottlenecking team to encourage the implementation of Indonesia Single Risk Management. This system is expected to be able to map companies with high compliance levels.

“So these companies are already profiled. If a company has a good track record, then don’t hold back their raw material imports,” Bob concluded.

With an accurate profiling system, the government is expected to be more selective yet still supportive of strategic industries, so that the target of strengthening the rupiah through the export route can be achieved without sacrificing the wheels of national production.