Mega calls on businesses to prepare for free trade era
The Jakarta Post, Jakarta
President Megawati Soekarnoputri called on the country's businesses to be prepared for the looming trade liberalization era despite current economic woes at home.
She said that local businesses must use their comparative advantages to improve competitiveness as the government would not continue its protectionist policies.
"We cannot keep applying defensive measures amid threats of imported goods that will enter our domestic market," Megawati said in her opening speech during an award ceremony for the country's most impressive export firms. The acknowledgement is known as the Priminiyarta Award.
"We don't have much time. Next year, we'll enter the ASEAN Free Trade Area (AFTA)," she added.
Several businessmen had earlier urged the government to launch measures to protect local industries against cheaper imported products amid the current global economic slump. Some businesses had also said that they were not yet prepared to face AFTA.
Under the AFTA program six of the oldest members of the Association of Southeast Asian Nations (ASEAN) are required to slash import duties on manufacturing and agricultural products to between five and zero percent.
Megawati said that Coordinating Minister for Economy Dorodjatun Kuntjoro-Jakti and Minister of Industry and Trade Rini Soewandi had been instructed to work closely with related ministries or state institutions to develop a strategy to face the trade liberalization era.
A total of 37 export companies received the Primaniyarta Award for their outstanding export performance over the past five years.
Of the 37 recipients, 13 were national-level firms and the remaining were companies operating at the provincial level.
The president hailed the award winning companies for their relentless effort to move forward despite a gloomy outlook in both domestic and international markets.
According to Rini the award assessment was carried out by a team of experts from various departments and state institutions.
Noted economist Suhadi Mangkusuwondo chaired the panel of judges.
The basic criteria used was that the participating companies should be free of bad loans, tax debts and customs and excise services. Perhaps the most important criteria was that companies could not be under the supervision of the Indonesian Bank Restructuring Agency (IBRA).
Wednesday's occasion was the first to be held after a five- year hiatus. Primaniyarta awards were bestowed upon exporters annually from 1992 until it was suspended during the 1997 economic crisis.
Exporters participating in the selection process were divided into four groups according to the total value of their exports over a five-year period, ranging from US$500,000 to over $70 million.
The star of the day was cooking oil producer PT Musim Mas after it took home this year's Primaniyarta Gold award. It was the fifth time the company had received the award.
Musim Mas is an integrated agro-industrial group of companies, which owns oil palm plantations, palm oil refineries and oleo- chemical industries in Sumatra and Java. The group was honored with the Primaniyarta export award every year between 1992 and 1996.
PT Busana Perkasa Garments, which topped the four medium-size exporters that received the Primaniyarta, owns apparel factories in Bogor, W. Java.
Busana Perkasa's foreign customers include such famous brand names as Nike, Liz Claiborne, Marks & Spencer, Jones Apparel Group, Tommy Hilfiger, Levi Strauss, Philips Van Heusen and Ralph Lauren.
Busana Perkasa, which also received the export award in 1996, exports to 20 countries mainly in Europe and the United States.