'Indonesia set for a fall in free trade era'

'Indonesia set for a fall in free trade era'

Ridwan Max Sijabat, The Jakarta Post, Jakarta

Indonesia will not be able to take advantage of increasing world
trade liberalization because many stakeholders here are not even
aware it is going on, an official says.

The chief of the Manpower and Transmigration Ministry's Center
for Research, Information and Development, Harry Heriawan Saleh,
said the government had moved too slowly to anticipate opening
markets. Businesses were also ignorant of how they could benefit
from the changes to trade rules, Harry said.

"Most investors do not care about free trade, while our
national education sector and most professional associations are
almost completely unaware of it. The government has done only a
little to prepare the necessary policies and regulations and
promote the progress Indonesia has made in negotiations (with
developed countries)," he told The Jakarta Post here on Thursday.

Harry feared Indonesia would be unable to take any comparative
advantages from freer trade.

"This country will become a big market for foreign products
and workers while we will not be able to use the same
opportunities to sell our products and workers (overseas)," he
said.

The Asian Free Trade Agreement (AFTA) is due to take effect
next year, with all 10 ASEAN member nations opening up their
labor markets in 12 main sectors, including communications,
transportation, education, health, finance and tourism. The plan
is in line with the World Trade Organization's free trade
deadline of 2020; the year developing countries are expected to
have removed all of their trade barriers.

Compared to its neighbors, Indonesia was lagging behind in
preparing for the free trade era, Harry said.

"Our neighbors, such as Singapore, Malaysia, Thailand and the
Philippines, have been making their preparations for the past 10
years, meaning they are ready not only with the sectors that will
be liberalized under AFTA, but also with the requirements for
foreign workers. These three countries have also made bilateral
deals or agreements with developed countries under GATT (the
General Agreement on Tariffs and Trade).

"Indonesia has been spending the time defusing the economic
crisis that has crippled its economy country since 1997. It has
so far struck no bilateral agreements on free trade with other
countries," he said.

Indonesian Institute of Sciences (LIPI) researcher and
economist Widjaya Adi, meanwhile, expressed optimism that
Indonesia could take advantage of the liberal markets, as long as
the government intensified its efforts to inform stakeholders.

"The government should firstly liberalize the education sector
by adopting developed countries' competence-based education and
training curricula and recruit foreign instructors to improve our
education quality in line with international standards," he said.

The health sector should then follow suit to help improve
Indonesia's medical workers and paramedics, Widjaya said.

Harry and Widjaya agreed that the government and professional
associations should encourage all vocational centers to adopt
internationally-accepted standards in order to produce skilled
and certified workers.

"Liberalized labor markets will not just require diplomas,
they will need skilled and competent human resources," Widjaya
said.