The Ministry of Trade planned to restrict import of readily consumable food and food raw materials by next year to increase domestic production capacity. The director of Import, Dir. Gen. of Trade of the Ministry of Trade, Thamrin Latuconsina reminded importers on Thursday [11/12] that import of consumable goods, such as horticulture and meat, could be reduced.
Thamrin said that restriction of import was not only for ready food also rae materials. Restriction did not mean moratorium of international trading because it might trigger objections by buyer countries.
Therefore the Management was preparing the right instrument to be exercised to minimize dependency on imported raw materials. Various experimented had been experimented. Now Indonesia was ready to be self-sufficient in some products such as salt.
However Thamrin was not sure Indonesia would completely stop importing. The reason was that self sufficiency in certain commodity was already 90% and there must still be 10% of import. As known, according to WTO rule import restriction might not be zero percent. Hence the portion that had been supplied by import could not be fulfilled domestically. On the other hand Indonesia’s dependency on imported raw materials was still high.
Meanwhile Agus Tjahjana, Dir. Gen of International Industrial Collaboration, Ministry of Trade Stated that dependency on imported raw materials and auxiliary materials would never cease as long as local industry was not developed. Agus said that lessened import of raw materials and components indicated that domestic industry was growing.
To minimize dependency on import, investment must be increased. Increased of investment must be allocated to sectors where dependency was high. The Ministry of Trade rated hat the sector was among others the automotive sector. The highest need of automotive industry was steel and iron. As a whole the Ministry of Industry set higher target of investment for 2015. The present target set was Rp210 trillion and next year set at Rp270 trillion.
He further rated that dependency on raw materials and auxiliary materials was hard to avoid due to low domestic support. He believed that effort to develop raw materials and spare parts industry must be intensified. The objective was to stimulate growth of the upstream industry and supporting industry and reduce dependency on imported goods. The prioritized industry sectors were agro business, minery, oil-gas and petro-chemicals which was formulated in National Industry Development Masterplan [RIPIN] 2015 – 2035.
The Ministry of Industry noted that in the first half of this year import of raw materials and auxiliary goods constituted 68.50% of total import or USD 42.80 billion. The remaining 23.74% was for capital goods USD 14.83 billion [68.14%] and consumer goods USD 4.85 billion [7.76%]. Meanwhile import of capital goods was USD 31.49 billion [23.96%] and consumer goods was USD 10.37 billion [7.89%]. The Ministry of Industry projected supporting industry would not grow significantly in the next 5 years. Dependency on imported raw materials and auxiliary goods would remain to be at around 60% - 70% of need. (SS)
Business News - December 17, 2015