Pressure mounts on govt to review textile quota

Pressure mounts on govt to review textile quota

Adianto P. Simamora, The Jakarta Post, Jakarta

Pressure is mounting on the government to review the
management of textile export quotas by the Ministry of Industry
and Trade after the Indonesian Textile Association (API) called
over the weekend for an independent audit of the management.

Natsir Mansyur, an executive of the association said the audit
was necessary to see if the ministry had managed the textile
quota fairly over the past years.

"The government could name an independent auditor, such as
(U.S. firm) PricewaterhouseCoopers and we are ready to finance
it," Natsir told The Jakarta Post.

The association has long criticized the government's lack of
transparency in distributing export quotas for textile producers,
causing grievances among them.

The trading of export quotas by brokers has been rampant in
the past, forcing many textile producers to pay a hefty price for
the quota so that they can export their products to the so-called
"quota countries", such as the U.S. market, which is one of the
country's largest textile markets.

"This (transparency) is the main problems. We can't trace the
total quotas allocated by the government and the holders of the
quotas," Natsir said.

Several lawmakers earlier urged Minister of Industry and Trade
Rini M. Soewandi to revise the existing allocation system to
boost transparency in allocating export quotas.

Azwir Dainy Tara, a lawmaker at the House of Representatives'
Commission V overseeing trade and industry said that the
Ministerial Decree No. 311/MPP/10/2001 on Textile Quota issued by
Rini must be changed.

The decree allows textile producers to maintain the same
permanent quota in the following year provided they are able to
fulfill the quota given in the current year.

Textile quota distribution has often caused controversies over
the past several years. Last week, controversy over the issue
broke out again following the sharp increase in the price of
quotas of trousers and jeans products exported to the U.S.

The country's textile producers were surprised to learn that
as of May, 70 percent of this year's annual export quotas of
trouser and jeans -- totaling about 192,000,000 million pairs of
trousers and jeans -- had been filled, while there has been no
indications of local companies significantly boosting their
output. Normally by May, only 23 percent of the quota for the
products is filled.

There are still quotas for the products on the local market,
but the price was too expensive at around US$30 per dozen of
export items, compared to the normal price of between $5 and $8
per dozen of export items.

The U.S., Europe and Japan account for about 45 percent of
Indonesia's textile exports, while the so called "non-quota
countries", that is the countries in the Middle East, Latin
America and Africa, take the remaining 55 percent.

Data from the Ministry of Industry and Trade shows that the
export of textiles and textile products reached $7.6 billion last
year compared to $8.2 billion in 2000.