Smuggled textile products harm local industry

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)