Monday, 31 January 2011

Secretary General of the Indonesian Businesspeople Association (APINDO): INVESTMENT IS NO COMPENSATION TO RENEGOTIATION FAILURE OF TARIFF POST

The Government was rated as having failed to renegotiate 228 tariff post which had the potential to bear loss due to implementation of ASEAN-China Free Trade. As compensation, the Government of China promised to invest in all sectors in Indonesia whereby to maintain a well balanced trade relationship.

As reported, in April 3, 2010 a 10th Indonesia-China joint commission meeting was held in Yogyakarta. Each delegation was led by Indonesia’s Ministry of Trade Mari Elka Pangestu and China was represented by Chen Deming. In that meeting the two countries agreed that the two countries would implement the AC-AFTA Agreement comprehensively. This implied that there would be no revision in the agreement made in 2004, while AC-AFTA would be effective as per January 1, 2010.

The compensation promised by the Government of China triggered various responses from the businessworld. It will be hard for Indonesia to draw investments as promised by the Government of China “In short, investments cannot serve as compensation on the failure of renegotiation of tariff posts.”

Djimanto, Secretary General of the Indonesian Businesspeople Association (APINDO) disclosed to BusinessNews on Saturday (19/6).

If China planned to invest in Indonesia, they should clearly specify the plan in what sector, in what magnitude, direct investment or just investment in portfolio ? The Government needed to make a specified calculations and stipulate the pre conditions which would bind the two countries, so China was obliged to keep their promise to invest in Indonesia.

It was not easy to postpone AC-FTA “How can renegotiation be made only between Indonesia and China, it is an ASEAN-China Free Trade Agreement. If re-negotiation were to be made, other countries in ASEAN must be involved.” What the Indonesian Government and private sector could do today was to strengthen competitive edge of Indonesian national industry, whereby to complete against China.

To strengthen competitiveness of the national manufacturing industry, three things were needed:

Firstly, to ensure procurement of energy electricity based on coal, gas, oil and thermal heat. To check competitiveness of energy cost.

Secondly, to upgrade skill and competence of workers

Thirdly, to allow lower bank interest rates. Conclusion Failure of renegotiation of tariff post

must motivate the industry to strengthen their competitive edge.

To invite investors to invest in Indonesia was not an easy matter. Indonesia was still handicapped by problems and obstacles which made investors to remain in a wait-and-see position. “How do you expect investors to come if the electricity black-outs now you and then, workers burst into demonstrations and illegal collections are still at large.”

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