Textile body blasts plans on export quota monopoly
Textile body blasts plans on export quota monopoly
JAKARTA (JP): The Federation of Indonesian Textile Industries
criticized the plan of several private businesses to monopolize
the distribution of export quotas and the importation of cotton.
Federation Chairman Husein Aminuddin, in a statement made
available to The Jakarta Post last week, said a monopoly would
harm textile exports and the textile industry.
"This plan... aims at monopolizing the export of textiles and
textile products and the import of raw material," he stated.
Aminuddin said the people behind the plan intend to submit a
request to the Ministry of Trade and Industry for the right to
bundle the three monopolies in to a single package.
The privilege of distributing export quotas was previously
held by the Ministry of Trade, before the ministry was integrated
last month with the Ministry of Industry.
Aminuddin said that ever since export quotas were issued by
industrialized importer countries -- which include the United
States, members of the European Union, Canada and Norway -- their
distribution among Indonesian companies has never run smoothly.
Quotas, he said, have always been an object of contention.
"Textile producers are not the only ones fighting for the quotas.
Non-textile companies and even (social) foundations fight for
them," he said.
Export quotas, Aminuddin said, have become traded goods and
are now a lucrative source of income.
"People who can get a share of the quota, but are unable to
export the (textile) commodity, sell the quota to producers who
need it," he said.
The distribution of export quotas, he said, is not carried out
transparently and the criteria for the allocation has never been
clear.
He said that as long as export quotas continue to be treated
as goods, their distribution and, in turn, Indonesia's textile
exports, will never bring in maximum benefits.
The government announced in November that Indonesia's textile
exports and textile products -- the country's largest foreign
exchange earner among non-oil products -- only increased 1.4
percent to $3.3 billion during the first seven months of 1995
over the same period in 1994.
Exports in 1994 decreased by 8.1 percent, to US$5.6 billion,
from 1993.
Aminuddin said that appointing a single consortium to manage
the quotas would make things worse, because conflicts of interest
would increase. "Prices of quotas would become more expensive
because they would be monopolized by the consortium," he
reasoned.
Consequently, he said, the price of Indonesian textile and
textile products would not be able to withstand international
competition.
Aminuddin predicted that the unfavorable 1995 export market
would continue this year. Such a situation, he said, would not
only be felt by Indonesia but also by other exporters like China,
Vietnam, Sri Lanka and Pakistan.
"The United States, the world's biggest textile importer, had
a dull market in 1995, as consumers reduced their buying. There
seems to be no sign of recovery yet," he said.
Aminuddin said that plans to monopolize the importation of
cotton fiber would also upset textile production in Indonesia.
"Cotton prices are determined by futures trading on the New
York market, thus manufacturers make imports according to their
need and according to the daily fluctuating prices on the
market," Aminuddin said.
Indonesian textile factories presently import almost all the
cotton they need, a total of 2.3 million bales a year. From this
amount, 45 percent comes from the United States. "If this is
monopolized, the profits of the monopoly holder will be huge," he
said.
Aminuddin, who is also the chairman of the Association of
Indonesian Spinners (Sekbertal), said that between 1985 and 1986,
the association succeeded in stopping PT Cerat Bina Tekstil
Indonesia from monopolizing cotton imports.
"Sekbertal, which is made up of spinning factories and cotton
merchandisers, will continue to do so," he said. (pwn)