Indonesia cautious over acceleration of AFTA
JAKARTA (JP): Government officials and business executives are cautiously approaching Brunei's call for members of the Association of Southeast Asian Nations to speed up the completion of trade liberalization by the year 2000.
The Sultan of Brunei, Hassanal Bolkiah, told the 28th ASEAN Ministerial Meeting in Bandar Seri Begawan Tuesday that he hoped the ASEAN Free Trade Area (AFTA) would be realized by the year 2000, three years ahead of schedule.
"I am optimistic about the proposal, but it depends on the other ministries on the reduction of tariff and non-tariff barriers," Minister of Trade Satrio B. Joedono said here yesterday.
The Ministry of Industry, for example, will have to help prepare the country's manufacturing industry to face liberalization of industrial trade among ASEAN members, he said.
In addition to Indonesia, ASEAN also groups Brunei, Malaysia, the Philippines, Singapore, Thailand and the new member Vietnam. The association, under its agreement on AFTA, is currently committed to gradually lowering import duties of member countries to between zero and five percent by the year 2003.
"We have to discuss the acceleration proposal in an inter- ministerial meeting," Joedono said shortly after inaugurating 27 officials in the ministry.
He expressed doubt whether the Director General of Customs and Excise, for example, would be able to change all the documents on the new tariff codes for some 9,000 trade items.
Meanwhile, Minister of Industry Tunky Ariwibowo told the press after meeting with President Soeharto at the latter's residence here yesterday that Brunei's proposal has to be studied.
"I have read newspaper reports saying that the suggestion on the acceleration of trade liberalization came from Brunei, which has not developed any industry. Certainly, we will study the idea very carefully," Ariwibowo said.
"We must be very cautious because Indonesia is the biggest market in the ASEAN region. Whether the idea will benefit Indonesian industries needs to be discussed by the ministers," he added.
Deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Iman Taufik also commented that he is doubtful of Indonesia's ability to compete should the AFTA be in effect by the year 2000.
"I am indeed doubtful of Indonesia's capability to compete against Thailand, Malaysia and Singapore due to our high-cost economy," Antara quoted Taufik as saying.
Indonesian businesses have often expressed their concern with red tape and long licensing procedures in the country, both of which have increased production costs.
The businesses don't seem to be ready to face fiercer competition, said Taufik, citing the example of the Salim Group, which exports only six percent of its companies' total products.
Poor transportation conditions and infrastructure facilities remain obstacles to improving the competitiveness of Indonesia's products on the international market, said Taufik.
He suggested that the government speed up the readiness for competition by introducing more deregulatory measures, reducing import tariffs and simplifying procedures.
A reaction to the proposal was also given yesterday by the chief commissioner of PT Astra International, A.R. Ramly, after meeting with President Soeharto.
"We will bring Brunei's proposal to the next ASEAN summit meeting in November. But in my opinion, it is better for us to maintain the AFTA deadline of 2003," said Ramly, who met the President in his capacity as a member of the APEC Pacific Business Forum. (kod)