LEVEL OF DOMESTIC CONTENT MUST REACH 40%

Presently the level of local content (TKDN) of products used domestically, especially by the Government, was still low. The low usage level of domestic products by the Government and State Owned companies was due to lack of illumination. This was disclosed by Secretary of the Director General of Textile Metal Industry and Variety (ILMTA) Suprijanto during the Illumination session of Application of Domestic Products (P3DN) at the Ministry of Industry Jakarta (4/6/2010).

Suprijanto explained that there had been a good number of socialization, so the Ministry of Industry needed to continue informing Government institutions about using domestic products. Apart from illumination, Suprijanto elaborated that the low usage of domestic products was because the products were not produced at home or they were produced but the specifications were not suitable “Somehow we plead all institutions to increase use of local content in producing goods” he stressed.

Meanwhile Chairman of the Program for Utilization of Domestic Products (P3DN) KADIN Indonesia Natsir Mansur set forth that with the implementation of AC-FTA there was business diversification new industries were emerging, utilization was uplifted, while orders for industrial products soared up. For that matter, according to Natsir, we needed a policy which strengthened the domestic market. The Government should do more than just extend tax incentives but also ensure certainty for the management of manufactured goods.

“The Indonesian currency must be spent on Indonesian made goods. Let their be no local businessman who feels it hard to be the master in his own threshold” Natsir disclosed it to Business News. To illustrate, businesspeople in China or in any ASEAN state were giving special privileges to local players in a tender of procurement of goods and services for the Government. Therefore, supposedly the Government sets up certain criteria for foreign companies who participated in any tender of goods and services in Indonesia.

In the effort to secure the domestic market, the Presidential Decree Keppres no. 80/2003 on the Guidelines for Procurement of Government Goods and Services should be seriously implemented. Let there be no Ministry or Institution who bought imported goods. For that matter, local content standard for Government Institution and State Owned companies were set at minimum of 40%. “Never let it happen that just because some foreign product was slightly cheaper, the local product with 40% local content was cast aside.”

To quote information of Bank Indonesia, allocation of State Budget for Government shopping must increase year after year. In 2009, for example, Government institutions Rp 503 trillions, an increase against 2008 which was Rp 417 trillion. “This is a great opportunity which must be grabbed by local players to supply products to Government institutions.”

In monitoring implementation of local content rules (TLDN), the Indonesian Chamber of Commerce collaborated with the Board of Government Financial Supervision for Development (BPKB) who would become part of the Task force of the National Team (P3DN). “The BPKP will also monitor the local content factor. So don’t be surprised if suddenly the BPKP comes to one of the Government’s office to inquire about local content.”