The government continues to suppress the volume of imported products and encourage the growth of domestic industries, especially base metal material industries. Data from the Ministry of Industry mentioned that currently the metal industry supplied at lest 85% for machinery equipment. Considering that it plays a role in the development of national industry, the Ministry of Industry is committed to protecting the national industry.
Minister of Industry, Saleh Husin, in Jakarta, Friday (June 26), said that the metal industry is one of the basic industries that support production of capital goods supporting other industries. With metal as the main raw material, the industry is recognized as having a role in the development of national industry. the position of this industry as supporter of other industry is also strengthened by base materials industry growth, where in 2014 grew by 5.89%.
Meanwhile, to ensure the availability of raw material supply, the Ministry of Industry has supported local resource-based metal industry development program. He explained that the potentials of abundant domestic raw materials which have not been used optimally is also a great opportunity for improvement of product competitiveness.
Saleh Husin also stressed that the government continued to suppress the volume of use of imported products and encourage the growth of domestic industry, especially base metal industry. The strategy is the increased Use of Domestic product (P3DN) program. Through P3DN program, Industry Minister said that the government provides support to become a trigger to increase the use of metal products in the country, especially in projects financed by the state budget (APBN). One of them is by requiring government agencies to maximize the use of domestic products in the procurement of goods/service funded by state budget (APBN)/regional budget (APBD).
The Ministry of Industry, said Husin, has repeatedly encouraged the use of local products in every government project. Unfortunately, supervision and enforcement are not yet evident, so the urge t improve the domestic industry is still considered lacking. He said that the sluggishness of the world steel industry led to the migration of production to countries that have high demand. According to the Minister of Industry, Indonesia with a variety of infrastructure megaproject plans, has become the target of world’s steel producers.
Meanwhile, Indonesian Iron & Steel Industry Association (IISIA) is pessimistic that the implementation of the regulation on steel import duties from most favorite nation (MFN) is able to stem the flow of imported products into the country this year. Data from the Central Statistics Agency (BPS) shows that the volume of imports of iron and steel in January-May 2015 is 4.970 million tons, or equivalent to USD 3,538 billion. Of the 15 major iron and steel exporting countries, eight have had a free trade agreement (FTA) with Indonesia.
Executive Director of IISIA, Triseputro Hidayat, said that sources of iron and steel imports mostly come from countries that have had FTA with Indonesia. Hidayat believed that tariff harmonization seemed not to have a maximum impact, so it must also be supported by specific non-tariff barrier.
Hidayat explained that the Minister of Finance has issue Minister of Finance Regulation No. 15/2015 on Second Amendment to Regulation of the minister of Finance No.15/2015 on Second Amendment to Regulation of the Minister of Finance No.213/2011 on the stipulation of System of Classification and Exemption of Import duty Tariff on Imported Goods. The minimum limit of import duty is 15% for iron and steel products with tariff heading (HS) 72 is expected to boost local steel consumption which is currently unable to compete with imported steel.
He also revealed that the steel industry would petition to the World Trade Organization (WTO) against China’s unfair trading. He revealed that members of South East Asia Iron & Steel Institute (SEAISI) have agreed to protest against the Chinese government’s policies, which imposed a tax rebate for downstream products, and exports of upstream products were imposed with high rate. He said that with the policy imposed by the government, there is no country in the world that can resist. (E)
Business News - July 1, 2015