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)