The Jakarta Post
The Indonesia Textile Association (API) projects that garment exports will stagnate this year after declining by 3.2 percent to US$11.9 billion last year.
“It’s good if it’s stagnant. Last year it declined because there are several problems that still persist in the country, though there have been some improvements in facilities from the government to boost the sector,” API chairman Ade Sudrajat told The Jakarta Post recently.
Problems include contradictory policies between central and local administrations, complicated tax procedures, inadequate infrastructure that leads to high logistics costs and electricity and gas prices that are higher than neighboring countries.
Besides internal challenges, Ade said the Indonesian textile business also faced tough competition in trying to expand its share of the international market. He called on the government to expand trade agreements with big buyers.
“Indonesia can lobby the United States to expand its GSP [Generalized System of Preferences] for more Indonesian garment items so more of our product can enter the country with lower tariffs,” he added.
The US is Indonesia’s biggest garment importer.
Despite the challenges, the association acknowledged some improvements in logistics, such as the establishment of dozens of bonded warehouses.
The association also acknowledged that the activation of more cargo lines from Gedebage Station in West Java – known as a center for garment production – to Tanjung Priok Port in Jakarta had boosted exports. (bbn)