Textile exports may fall short of achieving target
JAKARTA (JP): The country's textile exports will most likely fall short of achieving the target of US$7 billion this year because exports during the first quarter of this year declined by 26 percent to US$ 1.6 billion, the Indonesian Textile Association (API) said yesterday.
The association's chairman, Handoko Tjokrosaputro, told Commission VI of the House of Representatives (DPR) in a hearing that textile exports will continue to decline later this year due to many impediments.
The most visible hindrance is the textile quota systems introduced by major importing countries, which are worsened by the poor management of quota allocations among Indonesian exporters.
"It is API which knows the exact situation of each of textile company but unfortunately we are not involved in the quota allocations," Handoko told the commission, which deals with manufacturing, mining and energy industries.
He noted that the monitoring of quota utilization by exporters does not work properly. "Our capability and willingness to help monitor the quota utilization with an electronic visa verification system is not used at all."
According to Handoko, the system can monitor not only the implementation of quotas but also all export-import activities of textiles. "If the government had agreed with our suggestion, fictitious exports would never have happened," he said.
The government is investigating reports that a number of companies have been involved in falsely reporting textile exports in order to get funds from export facilities.
Not necessary
On a separate occasion, Minister of Trade Satrio Budiardjo Joedono told newsmen yesterday that API's involvement in the allocation of quotas for textile exporters is not necessary because the procedures are very simple.
"The portion of next year's quota for any given company depends on its export performance this year. It is not difficult at all to calculate," Joedono said.
The minister also rejected the argument that quota management is ambiguous, saying that every company is free to go to his ministry and ask for any information about it.
"If it is needed, I can announce it through mass media," he promised.
However, Joedono acknowledged that there are still ill practices in quota trading among textile companies. "That's the disease which needs special treatment."
Besides the quota system, Handoko noted that the decline of the country's textile exports has also been caused by increasing costs for textile production, especially after the government raised regional minimum wages.
"As such, our textile and textile-related products lose their competitive edge on the world market," Handoko said.
However a number of legislators at the commission contended that the government's rules on minimum wages have to be enforced properly and API should support them to improve the welfare of the people.
"Our labor conditions are not so good, and it has become the concern of other countries, especially the United States which has repeatedly warned of terminating the trade privileges given to Indonesia under its Generalized System of Preferences if Indonesia does not improve the conditions of its laborers," said legislator Bachtiar Chamsyah. (rid/05)