Rights issue could hurt trade: Mar'ie
JAKARTA (JP): Minister of Finance Mar'ie Muhammad warned industrial countries that over-politicizing human rights and environmental issues could jeopardize the spirit of liberalized trade and investment.
Speaking at the fourth annual World Economic Development Conference in Washington on Friday, Mar'ie said that political threats to the liberalization of international trade and investment do not come only from those reluctant to remove tariff and non-tariff barriers.
"We need also to closely monitor the non-technical barriers which are closely linked to politics, cultural values and social welfare considerations," he said in his speech, a copy of which was made available to The Jakarta Post on Saturday.
He acknowledged that in the last couple of years, both government officials and the private sector in Indonesia expressed displeasure with what they see as non-tariff trade and investment barriers imposed by a number of developed countries.
The linking of human rights issues, environmental concerns and the condition of workers in Indonesia to trade and the provision of assistance have occasionally dampened bilateral relations with countries such as the Netherlands and the United States.
Mar'ie said it was necessary to consider the cultural context of each society or nation before urging for the implementation of non-technical barriers. Human capital and human capital endowment, he went on to say, are basically an essential part of the development process of a nation, its personal growth and its welfare.
Inefficiency
Mar'ie spoke out against protectionism, which, even in the short term, will create a premium for inefficiencies.
"In the end, any inefficiency will create an additional burden on the producer and consumer alike. Furthermore, any protectionist measure will inevitably trigger retaliation from the other side, which ultimately leads to trade wars," he said.
The government's long-time policy to provide protectionist measures to a number of industries in Indonesia has been widely debated as of late.
Instead of improving the nation's economic performance, critics point out that protected industries have become inefficient and monopolistic in nature. Observers also fear that the protected industries will be unprepared to face the challenges of free trade as scheduled by the World Trade Organization (WTO).
The WTO, formed in January of this year, stipulates a gradual cut back on tariffs for certain commodities to a maximum level of 40 percent.
Mar'ie also commented on a number of regional cooperation agreements. The ASEAN Free Trade Area, the Asia Pacific Economic Cooperation forum and the European Community should, he said, seek to liberalize trade among each group without excluding or discriminating against nations outside the group or region.
"Free trade areas should operate to enhance the implementation of free trade internationally. In this respect, it is hoped that regional cooperation can act as an impetus to smoothen, broaden and deepen international trade," he said.
Mar'ie pointed out that Indonesia has, in the last two decades, consistently shown its commitment to the goals of global trade liberalization as stipulated by the WTO.
Economic reforms, in the form of deregulations and de- bureaucratization, are aimed at making the economy more market- oriented and at creating a conducive environment for both foreign and domestic investors.
The reforms are also intended to mobilize private and domestic savings, boost industrial exports, adopt stringent fiscal policies and maintain monetary stability. (pwn)