Tunky meets exporters

Tunky meets exporters

Minister of Industry and Trade Tunky Ariwibowo, already
preoccupied with the preparations for the defense of Indonesia's
national car policy against complaints lodged by Japan, the
United States and European Union under the World Trade
Organization, has resumed what we see as fact-finding, free-
wheeling talks with exporters in Jakarta and the provinces.

The way Tunky conducted the open, frank discourses and the
honest manner in which he put himself in the shoes of the
exporters succeeded in encouraging them to speak their minds --
something which most businesspeople still avoid. The result was
that Tunky obtained accurate information on how the political
resolve on bureaucratic reform, including the reduction of red
tape, is in many cases still far from the point of bureaucratic
resolve.

At a meeting with small and medium-scale exporters, which
coincided with the export product exhibition in Jakarta last
week, Tunky was treated to a barrage of complaints from
businesspeople about red tape and uncertainty regarding tax and
import duty refunds, customs services and various other
regulatory requirements as well as irregularities in the
distribution of textile export quotas.

A similar meeting held by Tunky with local exporters in
Surabaya in the middle of this month also heard a chorus of
complaints about poor bureaucratic performance which hindered
exports. Mango exporters complained about the denial of value-
added tax refunds. Birds' nests exporters expressed frustration
over the requirement to obtain a letter of recommendation from
the Ministry of Forestry in Jakarta each time they wanted to
export a shipment. Exporters of furniture and teak products
attacked the policy of PT Perhutani, the state teak monopoly,
which inflated the prices of their wood.

The exporters' complaints indicated the lateness of various
government services and the arrogance demonstrated over the poor
service as though government funds originated from their own
pockets rather than from taxpayers.

The complaints are not completely new. Worrisome, though, is
the fact that despite the series of massive deregulation measures
and bureaucratic reform, most businesses continue to encounter a
capricious and vague regulatory environment. Needless to say,
that kind of environment is one of the most irksome sources of
uncertainty in business calculations.

Under such a situation, businesses have no way to anticipate
the resulting uncertainty, delays and unforeseen expenditures
caused by the executors of such a vague regulatory method because
bureaucrats seem to become specialists in the multiplication of
nuisances that only they can contain.

Businesspeople are often apprehensive because they never know
where the next demand for payments will come from, or how much
will be asked for. The problem is exacerbated by the absence of
an effective mechanism for businesses to redress or appeal their
grievances.

The bureaucratic problems are especially detrimental to the
efficiency and, consequently, competitiveness of small and
medium-scale exporters because they, unlike conglomerates, simply
do have not the staff, financial resources or the clout to deal
with the various bureaucratic levels.

At a time when the rate of export growth has been declining
due mainly to the increasingly eroded competitiveness of domestic
products, the effectiveness and efficiency as well as the
capacity of the bureaucratic institutions needs addressing in a
far more serious, resolute manner. The exporters' complaints
clearly show that the deregulation packages and bureaucratic
reform will not be effective in improving the overall efficiency
of the economy unless they are supported by competent and highly
accountable executing agencies.