General Chairman of Indonesian Electronic Producers Association (Gabel), Alam Surjaputra, when contacted by Business News, stated that Gabel proposed electronic products not to use high technology, like iron, fans, and other and they should be manufactured by local industry. For industries whose products are not produced by using high technology, but manually, should be listed on Negative Investment List (DNI). Therefore, Indonesia will be oriented toward an era of increase of national industrialization.
If the government not make rule from now, it is concerned that in the globalization era where large industries are also producing low-technology products, there will be no more opportunity for the domestic industry to improve. Indonesia will become a market of electronic products produced by foreign companies.
To promote growth of domestic industry in the framework of establishment of new industry or expansion, the government is demanded to give incentive in the from of tax allowance. While, to prevent domestic industry from relocating abroad, the government should create a conducive investment climate, law enforcement, and maintain security and political and economic stability.
Why do Chinese electronic industries continue to exist? All Chinese electronic industries, whether large, medium, or small industries, whether they have existed for a long time or the newly established ones, are required to provide an after-sales service comprehensively. During the Japanese electronic product era, all electronic products circulating were using foreign brands. In this new era, the government and the society must be aware that Chinese companies investing in Indonesia are large-scale companies. Competition will be tighter, not only in terms of after-sales service and financing, but also in various aspects, because in the globalization era there will be no boundary among countries, and import duty tariff will become 0%, so the challenge will be heavier.
In 1970, Japan started to sell electronic products by using Japanese brands, while local brands are almost non-existent. In the 1990s, there was competition among brands of other countries entering the local market. Since early 1990s, many electronic industries were already full manufacturing. In 1998 when there was a social unrest, electronic industries suffered from the consequences, and industries that have reached full manufacturing faced difficulty in maintaining their businesses.
After that, Chinese electronic products started to enter the Indonesian market. But, consumers must be smart in selecting which ones were considered goods that were using well-known brands. The government must also do brand/label arrangement, followed by standardization so that to achieve good quality.
Regarding employment relationship, it looks that the outsourcing system is still needed, especially to meet business demand in line with dynamic social-economic development. But, the implementation must be able to guarantee protection and fulfillment of worker’s social security (jamsostek). In this case, an outsourced works is ensured that he receives the rights and work protection insurance at least the same with other workers, and it set forth in the prevailing legislation.
And, in determining Minimum Wage (UM), it is enough to consider the Need for Decent Living (KHL) and economic growth components. While, worker’s productivity variable is important in doing periodic wage adjustment. In an attempt to minimize gap in UM value between regency or municipality where usually there is confusion in the calculation process at regental or municipal or provincial level, so it is proposed that UM should only be determined at the provincial level by considering objective KHL survey by competent institution, such as the National Bureau of Statistics (BPS), at the regental or municipal level.
Business News - August 24, 2012