Importer's boycott threat receives cool welcome

JAKARTA (JP): The Association of Indonesian Importers' threat to boycott Japanese goods over a dispute related to Indonesia's national car policy received a cool response from local businessmen yesterday.

Sofyan Wanandi, the chairman of the Gemala Group, said that a boycott would not only be inappropriate but also ineffective to deal with an international trade dispute.

"I think such a boycott does not make sense. We should avoid being emotional in dealing with trade conflicts with other countries," he said when asked to comment on the association's call to boycott Japanese goods.

The association's chairman, Amiruddin Saud, said Wednesday that it would boycott Japanese goods if Japan retaliated against Indonesia's controversial national car policy.

Japan, together with the United States and the European Community, has formally filed a complaint on the national car policy with the World Trade Organization.

Under Indonesia's new car policy, producers of a "national car" are granted exemptions from the import duties and luxury taxes that add about 60 percent to the prices of cars in Indonesia, as long as the local content of their cars reaches 20 percent by the end of the first year and 60 percent by the end of the third year.

PT Timor Putra Nasional, a firm controlled by President Soeharto's son Hutomo (Tommy) Mandala Putra, is the only company allowed to become a national car producer and so receive the tax incentives.

Sofyan, also chairman of Yayasan Prasetya Mulya, a social foundation owned by a number of Indonesian conglomerate owners, said that the planned boycott would only hurt the Indonesian economy.

Soedarpo Sastrosatomo, the chief commissioner of PT Samudera Indonesia shipping company, shared the same view with Sofyan.

Soedarpo said that Indonesia, considering the current state of its economy is still too weak to initiate a boycott when dealing with trade conflicts with developed countries.

"I don't think it would solve the problem. It will instead hurt our economic activities," he said, hoping that the two countries' governments would be able to solve the car dispute amicably.

Unlike the two businessmen, M. Sadli, one of Indonesia's most senior economists and a former cabinet minister, said that the association's threat is understandable.

"Well... it is just all right if it is only a threat," he said.

Sadli refused to comment further on the subject, saying that it is too premature to discuss measures that should be taken by Indonesia when facing possible retaliation from Japan.

"Consultation between the two governments about the car dispute are ongoing. So it is too early to show our position," he said.

In August last year, the association threatened to boycott Australian goods if the Australian government failed to prevent the burning of Indonesian flags during protests against the Indonesian policy on East Timor. The threat was not carried out. (hen)