Textile exports need push
Textile exports need push
JAKARTA (JP): President Soeharto Saturday instructed
government institutions and the private sector to close ranks and
take measures to improve Indonesia's competitive edge in textiles
and textile products on the world market.
"The government will continue introducing deregulatory
measures and will simplify procedures...while textile producers
should improve efficiency," he said at the opening of the seventh
congress of the Indonesian Textile Association at the State
Palace here.
He warned that next year's implementation of the new General
Agreement on Tariffs and Trade (GATT) and gradual trade
liberalization in the Asia-Pacific region will sharpen
competition while offering new opportunities.
New producers have emerged among developing countries, while
industrialized countries are making their textile products more
competitive, thereby creating fiercer competition on the world
market, Soeharto said.
"We, therefore, have no other alternative but to work as hard
as possible to make our products highly competitive," he said.
If Indonesia's textile industry has an edge, its economy will
grow faster. Otherwise, the country will face serious problems,
he added.
Indonesia, together with the five other members of the
Association of Southeast Asian Nations (ASEAN), has been
committed to liberalizing its trade by 2003. The Asia Pacific
Economic Cooperation (APEC) forum, of which Indonesia is a
member, also decided in the middle of this month to liberalize
trade among its 18 members by 2010 for its developed members and
by 2020 for its developing members.
The president suggested that textile producers build up their
competitive advantage by working more profoundly with the
government, restructuring their industrial facilities and
avoiding unhealthy competition among themselves.
Direction
He promised that the government would give clear direction on
its policies and would continue deregulating and removing
bureaucratic hurdles.
Soeharto admitted that textile and textile-related products
have contributed a large portion to the country's exports since
1989, nearly 16 percent.
According to the Central Bureau of Statistics, textile
exports, which contributed over US$6 billion to the country's
total exports in 1993, have grown by an annual average of 34.4
percent annually since 1989, as compared to the average growth of
20.5 percent in total non-oil exports.
However, the pace of textile export growth slowed down during
the first semester of this year, when textile exports declined by
8.5 percent to $3.3 billion from the same period of last year.
In a hearing with Commission VI of the House of
Representatives last week, textile producers complained that
their products have lost their competitive edge on international
markets due to their high production costs.
Factors contributing to the high costs include rises in
electricity billing rates, high interest rates, increasing labor
wages as well as hikes in the prices of raw materials.
Handoko Tjokrosaputro, of the textile association, told
journalists Saturday that long procedures for the withdrawing of
value added tax (VAT) have also affected the production costs.
The government has promised to reimburse the VAT to exporters
within one month. However, according to Syafioen of PT Great
River Industries, the time for reimbursement very often exceeds
one month, and a number of exporters even have to wait for a year
or two.
Speaking at the two-day congress Saturday, Minister of Trade
Satrio B. Joedono promised that the government will simplify the
procedure of the tax reimbursement. (rid)