GATT principles will affect Indonesian economy: Minister
GATT principles will affect Indonesian economy: Minister
JAKARTA (JP): A minister warned yesterday that the new
principles of the General Agreement on Tariffs and Trade (GATT)
will affect Indonesia's economy, which is not ready to face
fierce competition through trade liberalization.
"Some of our industries, such as textile manufacturing, are
footloose while others with comparative advantages, like the
forest-based industry, are facing non-tariff barriers in other
countries," State Minister of National Development Planning
Ginandjar Kartasasmita said in a seminar here.
He explained that many Indonesian industries are footloose
because they are too concentrated on the downstream level and are
not well supported by upstream industrial facilities.
As a result, these industries will have difficulty competing
with products from industrial countries that already have
developed upstream industries, most of which are protected
strongly by their governments, he said.
He said Indonesia cannot protect its infant upstream
industries heavily because the present era of liberalization
calls for a reduction of trade barriers.
Ginandjar, who is also chairman of the National Development
Planning Board (Bappenas), said that the country's forest-based
industry has competitive advantages on the international market
but that importing countries tend to protect their domestic
industries through such non-tariff barriers as environmental
stipulations.
He reiterated that now was the time for Indonesian industries
to foment downstream activities and that it was critical not to
fall behind neighboring countries that have also actively
promoted upstream industries in anticipation of the inevitable
global competition in the new economic liberalization era.
APEC
Hadi Soesastro, executive director of the Centre for Strategic
and International Studies (CSIS), told the seminar of the impact
of international economic developments on Indonesia's own
economy, saying that the country's businessmen are not prepared
well enough to face the trade liberalization that will likely be
adopted by the Asia Pacific Economic Cooperation (APEC).
APEC's 17 members are scheduled to hold their second
leadership meeting in Indonesia in November to work out plans to
liberalize trade among themselves by the year 2020.
"I have never seen an initiative, for example, to gather
policy makers, economists and businessmen at a same table for
discussions on APEC and all of its consequences," Hadi said.
Bimantara Group's executive director, Peter F. Gontha, one of
the panelists at yesterday's seminar, concurred that Indonesian
businessmen are not ready to compete with their regional
counterparts in the Asia-Pacific market, due to an absence of
close cooperation between conglomerates and smaller businesses.
Regardless, Ginandjar said that Indonesia cannot possibly
retreat from world competition.
Instead, Indonesia should take steps to face the challenges by
introducing various measures, including the continuation of
deregulation, the improvement of the human resources, the
strengthening of economic institutions, the improvement of
research and development activities and the introduction of
selective government interventions. (fhp)