Govt told to revise distribution of textile quotas

Adianto P. Simamora, The Jakarta Post, Jakarta

Legislators called on the Ministry of Industry and Trade to revise the existing allocation system of export quotas for textile products due to the lack of transparency.

"We have received many complaints from local textile producers mainly due to the lack of transparency in channeling the quotas; that's why we are asking the government to change it," Azwir Dainy Tara, a lawmaker at House of Representatives Commission V overseeing trade and industry affairs told The Jakarta Post on Thursday.

He was referring to decree No. 311/MPP/10/2001 issued by Minister of Industry and Trade Rini M. Soewandi on the export quota for textiles.

The decree allows textile producers to maintain the same permanent quota in the following year provided they are able to fulfill the quota given in the current year.

"The quota holders are mostly dominated by companies that have a close relationship with the current administration," said Azwir, adding that one alternative the government should take was to tender the quotas.

Another legislator, Irmadi Lubis, of the Indonesian Democratic Party for Struggle (PDI Perjuangan), said many had complained that the quotas fell into the hands of brokers, who traded them for profit.

"We have often asked Rini and her officials to maintain transparency in allocating the quota but that hasn't happened yet," Irmadi told the Post.

He added that the commission would summon Rini next month to explain the quota problem faced by the country's textile exporters.

Earlier on Tuesday, the Indonesian Textile Association (API) complained about the widespread trading of quotas for the export of trouser and jeans products to the U.S. market.

API official Natsir Mansyur said that the association was surprised to learn that 70 percent of the quotas had already been filled during the first four months of this year, while there had been no significant increase in the production of the products by companies here.

In comparison, fulfillment of this quota category during the same period last year was only around 23 percent.

API urged the government to disclose the name of the quota holders, which the ministry had said totaled 21 companies.

Natsir also said that quotas were now being sold at around US$30 for every dozen export items, compared with only $5 to $8 previously.

He feared that brokers had also sold the quotas to firms in other countries.

Data from the Ministry of Industry and Trade shows that the export of textiles and textile products reached $7.6 billion last year, compared with $8.2 billion in 2000.

The U.S., Europe and Japan account for about 45 percent of Indonesia's textile exports, while the "non-quota countries" in the Middle East, Latin America and Africa, take the remaining 55 percent.