Smuggled textile products harm local industry

JAKARTA (JP): Local producers of textiles and textile-related products fear that textile products being smuggled onto the local market will damage the country's struggling textile industry.

This is what Bambang Riyadi Soegomo, the chairman of the Association of Indonesian Textile Producers, told President Soeharto yesterday.

Bambang Riyadi was accompanied by Bambang Trihatmodjo, the chairman of the association's advisory council, and other members of the association's executive board.

The association's vice chairwoman, Lili Asdjudirdja, said the smuggled products were cheaper than locally-made ones.

"They are harming our textile industry," she said, adding that the smuggled products were usually no longer popular in their countries of origin.

She said it was very hard to identify countries of origin because the products did not have clear trade marks.

"We see that our textile exports are now increasing. But we're facing difficulties on the local market," she said.

Asked to quantify the total value of the smuggled products, Lili said: "I don't think we can quantify it. But as a matter of fact we see that our local market is flooded by smuggled products."

She cited Tanah Abang as an example, where prices of smuggled T-shirts were between Rp 4,000 (US$1.72) and Rp 6,000 a piece, which was several thousand rupiah cheaper than locally-made T- shirts.

She said the price of smuggled polyester filaments was Rp 3,000 while locally-made ones were Rp 6,000.

Sanyoto Tanudjaya, the association's other vice chairman, said the association had also reported that local textiles and textile-related products were having trouble maintaining their competitiveness on the world market.

"This serious problem will harm all of us if we don't address it wisely," he warned.

Textiles and garments still dominate Indonesia's non-oil exports, contributing $6.2 billion or 13.6 percent of the country's total exports in 1995.

He said that since 1993 the growth of textile and textile- related exports had declined, mainly because of decreasing demand and oversupply on the world market.

He said the high costs of the industry's inefficiency and the bureaucracy had dulled domestic producers' competitive edge.

"The high interest rates, taxes, various legal and illegal levies, the increasing prices of electricity, the telephone and water are burdening our textile industries very much," he said.

The association's secretary-general, Benny Sutrisno, underlined the importance of overseas promotions. "We absolutely must promote our textile products abroad if we want to see our textile exports rise," he said.

The association also proposed cooperating in managing an International Trading Promotion Center in a foreign country.

"Bapak President has suggested that the center should be managed by the private sector," Benny said.

He said their meeting with President Soeharto also touched on improving human resources and provincial regulations on the levies that burdened local textile producers. There are 257 regulations applied by provincial administrations and regencies.

Lili said that provincial regulations were sometimes contrary to the central government's, and some regencies applied a property tax similar to the one applied by the central government; only under a different name.

Benny said the President had mentioned that these regulations would be rationalized. He did not elaborate. (bnt)