Textile exports may fall short of achieving target

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)