'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.