Most local firms unready for trade liberalization
Most local firms unready for trade liberalization
JAKARTA (JP): As Asia Pacific Economic Cooperation (APEC) members in Japan prepare a blueprint for trade liberalization, many Indonesians do not believe the majority of companies here are ready to meet the APEC requirements.
A survey conducted recently by the Institute for Economic and Social Research (LP3ES) and the Center for the Study of Development and Democracy, revealed a perception of many professionals that state-owned, medium and small scale companies are ill-equipped to face stringent trade challenges.
Respondents expressed little faith in the ability and strength of Indonesian companies in the three categories surveyed: human resources, management and capital.
The 1,000 interviewees added their belief that only large private companies and conglomerates are ready.
The director of LP3ES, Rustam Ibrahim, explained yesterday that 59 percent of those polled -- interviewed in Jakarta, Medan and Surabaya -- believe that the government's role in the economy is still too large.
With nearly 80 percent of them having a university degree or higher, the respondents were comprised of private sector employees (56 percent), civil servants (13 percent), entrepreneurs (12 percent), legislators (10 percent), state-owned company employees (six percent) and the rest from various occupations.
With answers ranging from "very ready", "ready", "not ready", "not at all ready" and "do not know", more than 60 percent of the respondents said big companies and conglomerates were ready in terms of human resources, capital and management.
Prominent lawyer and political observer Todung Mulya Lubis supported the findings, saying that they reflected the views of most of Indonesian business people regarding trade liberalization.
He said, however, that the study also shows that there is general support for trade liberalization despite the current conditions.
The 18-member APEC forum, of which Indonesia is a member, is currently meeting in Japan to follow-up last year's declaration in Bogor, West Java, to implement comprehensive trade liberalization by the year 2010 for developed countries and 2020 for developing ones.
On the question of which sector would benefit Indonesia in an era of liberalization, respondents rated service (23 percent) and industrial manufacturing (24 percent) the highest.
Rustam said the choice of services as one of Indonesia's primary sectors was quite unexpected since experts believe that this will be one of the most competitive in the future.
When asked whether respondents supported the possibility of 100 percent foreign ownership of local companies, answers were split, with 42 percent in agreement and 41 percent disagreeing.
"This shows the controversy among us," Rustam said.
Mulya Lubis also noted that while there was support for trade liberalization, there was also a prevailing fear of the implications for local businesses.
When questioned about the current role of the government in free trade, respondents across the board felt that government control should be reduced.
Mulya Lubis pointed out that 89 percent of all respondents stressed the need to streamline bureaucracy.(mds)