Sat, 06 Feb 2010

Medan, N Sumatra (ANTARA News) - The government is seriously tackling damaged roads and electricity shortages to enable local industries and SMEs to face the implications of the ASEAN-China Free Trade Area (ACFTA), a trade ministry official said.

"Infrastructure problems remain something of concern to us. They have even triggered inordinate increases in production costs in the country. Therefore, the government will focus its attention on this sector," Gusmardi Gustami said Friday.

The government had also set up a special team to handle infrastructural problems for anticipating ACFTA`s implications and opportunities for the Indonesian economy, he told a seminar here.

Apart from any possible implications, he was confident in the capability of North Sumatra`s small- and medium-scale businessmen, particularly those in the agro-business sector, to compete with Chinese products.

Over the past three years, Indonesia`s economic growth was also "good enough". Indonesian exporters could expend their markets in such regions as Africa, Middle East, and Asia, said Gustami, director general of the trade ministry`s international trade cooperation.

At the Association of Young Indonesian Business Community (HIMPI)-North Sumatra Chapter organized seminar, Chairman of North Sumatran Forum for SMEs Cahyo Pramono also expressed his confidence in the Indonesian SMEs` toughness in facing the ACFTA.

But the government needs to take sides to local SMEs to make them stronger, he said.
The ACFTA had been made effective since January 2010 but its implementation triggered a public debate. Concerning with its negative impacts on the Indonesian economy, some called on the government to renegotiate the agreement with China.

In response to the call, President Susilo Bambang Yudhoyono recently admitted that renegotiating the implementation of ACFTA was needed to prevent the emergence of serious problems in the Indonesian economy.

As of January 2010, the ACFTA is entering the Normal Track (NT) I phase, imposing a zero percent tariff on 7,306 products or 83.61 percent of total tariffs on imported products reaching 8,738 products.