P

assing through the stalls at the recent 2012 Jakarta International Jewelry Fair (JIJF), made it clear that there are plenty of talented local jewelry designers in Indonesia.

For a long time now jewelry and gold has been part of the lifestyle of Indonesians, as it often complements Indonesian traditional clothes.

Backed by the strong culture of jewelry, Indonesia should be able to compete in the international jewelry market, but the industry is hampered by too many obstacles, said the Indonesian Jewelry and Gold Industry Association (APEPI) secretary general Iskandar Husin.

According to Iskandar, Indonesia’s gifted designers are not backed by technology to produce high quality jewelry and often face difficulties due to rigid government regulations.

“In terms of technology, our jewelry industry is left behind compared to neighboring countries such as Thailand and Malaysia. We still can’t produce jewelry as good as the international producers due to the lack of facilities,” said Iskandar.

The 20 percent value added tax (PPN) and 10 percent import duty on silver also complicate the efforts of local jewelry producers to compete with other exporters, said Iskandar.

The Industry Ministry’s director general for small- and medium-sized industries, Euis Saedah shared Iskandar’s view. “In the future, the government has to create an environment that supports these craftspeople. The ten percent tax on imported silver is not producer friendly,” she said.

According to Iskandar, the value of Indonesian jewelry exports in 2011 was US$480 million and APEPI is aiming to increase this to $500 million this year. He said that there are strong demands coming from European countries and from the Middle East, but to meet those demands the producers still needed middle-men to distribute the products.

“The government should improve government-to-government agreements to help increase jewelry exports,” he added.

Euis said that jewelry had a high economic potential and the government was planning to enhance the role of the jewelry industry in local and overseas markets.

“Starting from next year the Industry Ministry, in cooperation with APEPI will establish a training center that will be based in Jakarta, in order to improve our jewelry industry, especially for small and medium enterprises. One thing that we will surely provide is a gemstone polishing machine, so we can produce jewelry in large amounts,” said Euis. (nad)