Local retailers not ready for global competition

Local retailers not ready for global competition

JAKARTA (JP): Indonesian retailers, facing World Trade
Organization (WTO) principles on trade liberalization, said
Saturday they are not ready to compete with foreign retailers in
the near future.

"We have to assess our competitiveness, not to mention the
quality of our retail products which are still quite low,"
Secretary-General of the Indonesian Retailers Association
(Aprindo) Suryadharma Ali told The Jakarta Post at a retail
convention here.

According to WTO principles, Indonesia, as a developing
country, is required to gradually open its domestic market to
foreign retailers.

Supervisory council member Steve Sondakh said that it is not
yet the right time to start opening the Indonesian market to
foreign retailers because only big domestic retailers are in a
position to compete.

The director of the Indonesian Business Data Center,
Christianto Wibisono, suggested last week that the government
should start allowing foreign retailers to enter Indonesia on a
reciprocal basis which would require the retailers's countries to
let in more Indonesian products.

Christianto's suggestion was supported, but with reservations,
over the weekend by retailers Matahari Group and Metro
Supermarket Realty.

"Matahari is ready to compete with foreign retailers and the
government's protection of the retail market could be loosened
gradually," Matahari's president, Hari Darmawan, told the Post.

"The most important thing is that the government includes
Aprindo members in establishing strategies to help all retailers
get ready for competition," he said.

"It's okay to open the door to foreign retailers as long as we
gain profits equally," an assistant to the president of Metro
Supermarket, Subagio Sulistyo, said.

Aprindo executives from North Sumatra and Bali said they are
ready to compete with foreign retailers as long as the government
simplifies its bureaucratic procedures and reduces levies.

A number of convention participants said the low quality of
human resources and the torpid bureaucracy are the problems that
need to be solved immediately to help domestic retailers compete
against their foreign rivals.

Director General for Planning and Development at the Ministry
of Manpower Yudo Swasono said that standards of competence for
retailers should also be established to encourage domestic
companies to improve their human resources to be able to compete
fairly.

He said Aprindo should provide the criteria of competency.
"Special education programs in retail business should then be
established based on the standards," he said.

However, North Sulawesi retailers contacted by the Post said
that they are not ready to face competition with foreign
retailers due to the poor quality of their human resources. (06)