Import Oversight and Local Content Rules Key to Strengthening Domestic Products: Analyst

Jakarta (ANTARA) - Economist and lecturer at the University of Indonesia’s Faculty of Economics and Business, Dr. Toto Pranoto S.E., M.M, believes that strengthening import supervision and implementing the Domestic Component Level (TKDN) rules are crucial steps to enhance the competitiveness of local products in the domestic market. According to Toto, the opportunity for domestic products to develop is increasingly open, especially as the weakening rupiah exchange rate makes imported goods more expensive. However, this momentum must be balanced with policies capable of protecting national industry. ‘The implementation of TKDN is the key word,’ Toto Pranoto said in Jakarta on Tuesday. He stated that the government needs to tighten oversight at import entry points to prevent the influx of smuggled goods that can disrupt the competitiveness of local products. ‘The main challenge, of course, relates to how local industries can be protected from smuggled imported goods which have been very rampant lately,’ he said. Additionally, Toto assessed that domestic business players, particularly micro, small, and medium enterprises (MSMEs), also need certainty of raw material supply to maintain the smoothness of the production process. According to him, the availability of raw materials is an important factor considering many domestic industries still depend on imported raw materials. On the other hand, he cautioned that industry protection must be accompanied by efforts to improve competitiveness from the business players themselves. Furthermore, strong access to sources of raw material supply is also an important factor to maintain production sustainability and reduce the risk of supply chain disruption. He added that strengthening brand image or branding also needs to be a concern for business players so that local products are increasingly in demand by the public. ‘Strong company branding could be a determining factor for their competitiveness going forward,’ said Toto. According to him, the synergy between government policy and increased capacity of business players will be an important factor in strengthening the position of local products and encouraging the growth of domestic industry in a sustainable manner.