T

op economic ministers on Thursday rejected mounting accusations that the government is adopting a protectionist trade policy stance as Indonesia'€™s new import tariff policy came under the spotlight in the free-trade global community.

Even after the recent hike in import tariffs, Indonesia'€™s average duty of imported goods stood at around 8.3 percent, Finance Minister Bambang Brodjonegoro explained.

Bambang noted that the figure was among the lowest rates in the World Trade Organization'€™s (WTO) most-favored nation agreement, which regulates trade between member countries.

'€œOurs was still well below many countries. If you look at China, for example, their rate currently stands at around 9 percent,'€ he said at the State Palace on Thursday. '€œThis means we remain an open country.'€

The Indonesian government last month raised import tariffs for consumer goods ranging from food and clothes to cars in a move that was intended to support the local manufacturing industry against an influx of overseas products.

Import tariffs for overseas tea and coffee quadrupled from 5 to 20 percent, while for alcohol products the rate was lifted to as high as 150 percent.

International analysts have been critical of the policy, describing it as a misguided populist move from President Joko '€œJokowi'€ Widodo, especially considering Indonesia'€™s economic growth has slowed to six-year low of 4.6 percent in the second quarter.

Analysts from the Lowy Institute for International Policy in Sydney concluded that Jokowi was leaning toward greater protectionism with his set of trade restrictions.

The tariff hikes have given '€œnegative signals'€ on the government'€™s reform priorities, according to Nomura Holdings, a Japan-based fund manager. The policy reflected the '€œprotectionist tide'€ of the current government, analysts from Bank of America Merrill Lynch said recently.

Economists from the Singapore-based DBS Group said that the tariff hikes could increase Indonesia'€™s annual inflation by 0.5 percent as consumers'€™ price expectations for consumer goods go up, especially as the policy would affect more than 1,000 items.

Undeterred by the criticism, minister Bambang said that he was now preparing to harmonize certain tariffs that could help domestic industries by promoting imports of raw commodities and discouraging overseas purchase of finished goods.

Indonesia, the largest economy in Southeast Asia, is among the most sought-after markets among regional exporters, thanks to the strong purchasing power of its 250 million citizens.

Household consumption accounts for 55 percent of Indonesia'€™s gross domestic product (GDP). Total imports of consumption goods were valued at US$12.7 billion throughout last year, data from the Central Statistics Agency (BPS) reveals.

'€œIt is our intention to protect our domestic market,'€ Trade Minister Rachmat Gobel told reporters on Thursday. '€œWe may open our market to boost competitiveness, but there should be a protection against the influx of low-quality imported goods.'€

Coordinating Economic Minister Sofyan Djalil argued that it was not a hypocritical move for President Jokowi, a former furniture exporter, to lobby leaders from Turkey and the UK last month to lower their own tariffs for Indonesian exports, at times when the government was raising duties domestically.

The government was now only looking to fix its '€œerroneous'€ policy stance in the past as the economy had been too open for imports of consumption goods, the minister stated. Amid recent criticisms of the import tariff hike policy, Sofyan insisted that Indonesia would continue negotiations with its trade partners regarding the free trade agreements. '€œWe are looking to continue free trade negotiations with the EU. We are still playing with the rules of free trade and WTO.'€