Indonesia Needs Reforms to Bolster Competitiveness

Sunday, 10 September 2017 , 12:00:00 WIB -

A Huawei Indonesia information and communications technology infrastructure is seen sharing knowledge on the company�s new technology, to students at the Huawei Indonesia Customer Solution Innovation and Integration Experience Centre (CSIC), Jakarta, Friday (11/8).

JAKARTA, GRES.NEWS – Indonesia has been slow compared to neighboring nations, such as Vietnam, in realizing free trade agreements with other nations. As a consequence, the country’s products are having difficulty in competing with overseas products.

Investment Coordination Board (BKPM) head Thomas Trikasih Lembong exemplified Vietnam, who have been showing more aggressiveness in signing Comprehensive Economic Partnership Agreement (CEPA) with other nations.

"They are introducing zero tariffs for goods while Indonesia is charging 10-17 percent, making it more difficult for our export products," Lembong, Jakarta, Monday (4/9).

"The government needs to attend to this problem. We will work so that we can sign a CEPA deal with Australia this year. We hope other nations open their market for us and we will do the same for them," Lembong said.

Lembong revealed five investment impediments in Indonesia. First, regulations that change frequently.
Second, taxes that limit businesses’ movement. Third, labor issues and human resources quality. Fourth, land and permit acquirement procedures. And Fifth, insufficient infrastucture.

"For example, the income tax for corporations, especially those in the industry sector, could reach 70 percent," he said.

Meanwhile, Director General of International Trade, Ministry of Trade, Iman Pambagyo, argued that Vietnam’s government has more freedom in making decisions, which includes decisions concerning free trade.

"We can’t compare Vietnam with other nations as they have a different government system. In Vietnam, there is only one political party, so when a superior says ‘A’, the people below him would say ‘A’. This is not the same as in Indonesia," he said. (dtc/mfb)