'We can't escape globalization anymore'

'We can't escape globalization anymore'

The Jakarta Post, Jakarta

Teni Wahyuningsih, 20, a business administration student at
Bandung's Padjadjaran University:

The full implementation of AFTA (ASEAN Free Trade Area) next
year is kind of a dilemma for us. It is good for consumers, as we
will have more choices of products at cheaper prices. But,
unfortunately, it is not good for local businesses.

Our businesses are not yet ready to face head-on competition.
We can see that most of the products produced by our local
industries have often been on the losing side when it comes to
competing with foreign products, even before AFTA.

Are they really well prepared for this? I doubt it.

I think the government should delay the full implementation of
AFTA for maybe two or three years, during which the government
could help, through different policies, strengthen local
businesses in order to allow them to better compete with foreign
products.

Yolanda, 22, a student at Trisakti University:

To be honest, a year after the implementation of AFTA, I
haven't seen significant changes in terms of products in the
market. I mean, if I'm not mistaken, Indonesia's willingness to
enter AFTA was based on the assumption that once it took effect
the price margin between locally and foreign-made products would
narrow.

But I have not seen that happening since AFTA was partly
introduced earlier this year. The price gap remains wide.

Certainly, some foreign-made products sold here are not very
expensive compared to local products. But they are mostly unknown
brands. We still have to spend a lot to purchase high-quality
foreign goods.

If foreign products remain expensive next year, I think we
should reconsider our position in AFTA. If we aren't gaining
anything, why should we keep participating in AFTA?

Gunadi Sindhuwinata, the president director of PT Indomobil
Sukses International:

Indonesia reduced its tariffs on automotive components to 5
percent early this year in line with the soft launch of AFTA.
This is too fast, since other countries such as Malaysia and
Thailand have yet to reduce their tariffs. Thailand will only
lower tariffs next year, while Malaysia has delayed it until
2005.

Many people said that AFTA would become a nightmare for our
automotive industry. But, for me, the impact of AFTA on our
automotive industry is still unclear since there has yet to be a
study of it.

To survive the tough competition under AFTA, we should
strengthen our supporting component industry. We don't have as
many automotive component producers as in Thailand and Malaysia.
If we had a strong component industry supporting our automotive
industry, we would not need to import components from other
countries. This would enable us to trim our production costs.

Teddy Sutendi, 26, an alumnus of the Bandung Institute of
Technology, currently employed at state-owned electricity company
PT PLN:

I positively welcome AFTA because not only will it benefit
consumers but also force our industries to improve their
efficiency to compete with foreign products.

In the short term, I think, foreign products will sweep up
local products, forcing local industries to struggle to survive.

In the long run, however, I believe local industries will
improve their performance, because they will be left with no
choice but to be able to compete internationally.

On top of that, it's the consumers who will benefit the most
from AFTA, since the flow of imported goods will force prices
down.

The consumers will also have more options because products
will be coming from more than one country.

But I think the government should put more emphasis on efforts
to develop our agricultural sector. The sector has a high level
of resilience, even when other sectors were suffering during the
crisis.

More financial and technical assistance should be given to
those involved in that sector to help them cope with market-
friendly mechanisms, such as AFTA or other similar free-trade
pacts.

Meilia Sukma, 28, a postgraduate student at a Jakarta
university and an employee at a foreign embassy in the capital:

One thing that is for sure is that we cannot run away from
globalization, and AFTA is part of globalization.

So rather than voicing objections, we should think more
seriously about how to make the best of it. We surely do not want
to be isolated from what is going on in the world.

I know that participating in AFTA will be risky, especially
for our shaky local businesses. But avoiding it would definitely
have bigger consequences.

Thanks to AFTA, consumers will have more options when it comes
to products. And producers will compete in terms of their prices,
which in the end will benefit consumers.

As far as local industries are concerned, they should regard
AFTA as an opportunity to test their ability to compete with
overseas businesses. They have to produce better quality products
at affordable prices. Otherwise, they will lose their market
share.

The government, however, has to help local producers eliminate
smuggling or at least minimize the volume of smuggled goods.

Local manufacturers are already finding it hard to compete
with legally imported products, so don't make their lives harder
by doing nothing to stop smuggling.

Yulianti Pangesti, 32, a housewife who resides in Tangerang,
Banten province:

Since earlier this year -- I do not know whether it is because
of AFTA -- I have noticed that the prices of imported products
have edged closer to the prices of similar products made locally,
which is good.

I think all housewives will positively welcome the full
implementation of AFTA next year. I would even encourage the
government to enter other free-trade pacts because free trade
will lead to a decrease in the price of goods, with every
manufacturer racing to lower prices to attract customers.

All these years, the government's policies have only focused
on the interests of companies. I think it's time to treat
consumers better and put us where we belong.

The government should therefore be encouraged to produce
policies that benefit consumers.

Suharto, secretary-general of the Association of Rubber
Producers in Indonesia:

We don't expect a significant impact from AFTA on the
Indonesian rubber industry, since some 92 percent of our annual
output of 1.6 million tons of crude rubber is exported to
countries outside of ASEAN.

These countries include the United States, Japan, European
countries and China.

Total domestic demand for crude rubber is 140,000 tons per
year, and of that amount only a small percentage is imported from
Thailand and Malaysia. Therefore, AFTA will have a slight impact,
if any, on the domestic rubber market.

Domestic rubber production is more than enough to meet
domestic demand.