Textile-quota traders will be fined: Tunky

JAKARTA (JP): The government is to fine traders of textile- export quotas in a bid to encourage more exports of textiles and textile-related products.

Minister of Industry and Trade Tunky Ariwibowo said in Nusa Dua, Bali, yesterday that quota trading practices have marred the performance of textile exports because they have reduced export opportunities for those in the textile industry.

"To reach a target of US$12 billion from textile exports (per annum), we need to improve the management and supervision of quotas," Tunky was quoted by Antara as saying.

Exports of textiles and textile-related products exceeded US$6.2 billion in value last year -- or 13.66 percent of the country's total exports -- compared with US$5.8 billion in 1994.

During the first four months of this year, textile exports were $1.98 billion, up from $1.8 billion during the same period of last year.

The export director at the Directorate of International Trade, Sudar, explained that his office will monitor intensely quota trading among quota holders, especially between those who have no export capabilities but have secured export quotas from the government.

The Ministry of Industry and Trade distributes export quotas to textile producer-exporters, through which textile producers can export their products to countries which set such quotas.

Tunky said that the size of the fine for quota traders will be the same as the value of the traded quotas.

He noted that textile producers should not play around with quotas, considering that the government has given a number of new facilities to them.

In an effort to boost the country's non-oil exports, the government, through a deregulation package announced in June, has given special tax, customs and banking breaks to exporters of textiles and textile-related products, shoes, electronics, wood and rattan products and leather goods.

Banking incentives for exporters in the five sectors include a more favorable interest rate on rediscount facilities, longer- term usance letters of credit and freedom in deciding the level of fees for opening letters of credit.

The government, Tunky said, has so far extended such facilities to 44 companies and is still processing the proposals from 124 other firms.

The government, however, will not give such facilities to companies that violate the rules, including those which trade their quotas, Tunky said. (rid)