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)