E-conomics for non Economics
[Insight] Indonesia in 2010 economics outlook
"We are not ready yet to compete with China"
Free trade agreement in textile and steel industry might be pending due to some reason
That is the headline on kontan newspaper on Saturday, 12 December 2009. For a while I can't imagine what that word turns out, then when I remembered the other edition of kontan also told something about pending China-ASEAN free trade agreement by Indonesian government and the chamber of commerce.
Latest economics condition update
In the global perspective, Indonesia is classified as one of the emerging countries who survived the economics crisis these years. Many factors like the healthy banking industry compared to us and European, financial sector in Indonesia doesn't have a great connection with US, our food supply, oil price decreasing under $50/barrel and others like political stabilization compared to malaysia and thailand whom have problem in their political situation. As I can see the world competitiveness scoreboard, Indonesia rank is 41 in 2009 from 51 in 2008, 54 in 2007. And the most easy to look indicator is from jsx and rupiah, they showing a great progress from Q1 2009, now jsx is rated to 2500 and rupiah is still fluctuate on Rp 9600. So these thing is what so called strength in the SWOT analysis, it shows a good performance and what we have as a tools to exploit the opportunity. This thing is all a progress as you can see, even on 2009 inflation rate on yoy 2009 is ±3%, and this is somewhat one of the kind rates for emerging countries.
What will happen in 2010?
Vice president of Indonesia Mr Boedino is hoping to have 7% economics growth in 2010, while on 2009 is 4, 8% growth. This is just the target and still needs the real action and supporting regulation to achive that number. And in that year Asean-China Free Trade agreement (AC-FTA) will run on 1st january 2010, this agreement will involve many indsutries which is going to collapse and in danger in Indonesia such as textile, steel, food and beverage, electronics, machinery, engineering service, petrochemical, toys and shoes. All these industries is in danger because of their unstable market due to global economics recession last year, they are the industries who posess export trade for living. The results of FTA is to reduce the import tax in the member country to 5% on 2010 and 0% on 2012 it means the market will flooded with foreign goods because of the low tax rate and market expansion to other country by company.
Current situation
Those industries that I mention above cant help theirself on the global market so their looking for local market where it already full with illegal, and cheaper goods from other countries, yet this is another threat and trap. Look at the toys industries, if you have some spare moments just take look on your local toys trader near elementary school (sd) you will find that most of the toys he sells is made in china. Look for another example when you go to glodok electronics and lindeteves machinery market. And for now the impact is the government and the chamber of commerce decide to pend the agreement for Indonesia, the industry to go on pending list probably textile, steel and chemical. Then the other points of threat are the potential loss from tax and duty income for government on 2010 so on.
Regulation and oppurtunity
By the time we still become a major producer of food from our farmers and also a massive market to invest in Indonesia with the huge society, it has create the opportunity if the industries are ready to face the challenge. Not only the readiness of he industry but also regulation support from the authorities, for example malaysia give 25% tax rate for imported goods for their country to protect their local industries, while our government we don't do that kind of things and disasterly some of those goods imported to Indonesia are illegal goods that's two things our government must solved carefully. But for us maybe still a new hope, the industry who are not listed as in danger now can easily doing export their goods to ASEAN and China and the company can increase their revenue by exploting others market.
E-conomics for non Economics
Ideas.Insight.Impact
Rianhafizblog2009
Source : faisal basri ppt, detikfinance.com, bisnis.com, beritasore.com, business.globaltimes.cn
