Ada Pertanyaan? Hubungi Kami 
Ada Pertanyaan? Hubungi Kami Fitri Novia Heriani, Andin Aditya Rahman
The implementation of the ASEAN Economic Community in 2015 (AEC 2015) will bring about further economic liberalization in the region. In addition to trade liberalization, AEC 2015 will also open up the services, capital, and labor sectors to regional liberalization.
Recent doubts about Indonesia’s competitiveness has led businesses to question whether Indonesia will benefit from AEC 2015 or rather end up in a disadvantageous position compared to other ASEAN nations.
Hendri Saparini, Executive Director of the Center for Economic Reform (CORE) notes that AEC 2015 is not the first regional economy liberalization for ASEAN. In 1992, ASEAN entered into the ASEAN Free Trade Agreement (AFTA). At that time Indonesia suffered due to lacking sufficient competitive advantages. Imported products flooded into Indonesia aggravating the national trade balance deficit.
“The Government has stated that Indonesia is 82 percent ready to face AEC 2015. However, this percentage claim of readiness is in fact only based on a checklist which shows how far Indonesia has progressed in implementing agreements under the AEC 2015 framework,” explained Hendri in Jakarta on Monday.
Hendri has suggested four crucial elements that must be properly addressed by the Government in preparation for AEC 2015.
First, the implementation of AEC in 2015 will likely turn Indonesia into a supplier of energy and raw materials. This will result in the benefit of Indonesia’s natural resources going overseas, an undesirable outcome considering Indonesia currently has the highest trade balance deficit of all ASEAN nations. To address this issue, the Government must draft integrated industrial, trade, and investment strategies relevant to the implementation of AEC 2015.
Second, AEC 2015 will worsen the trade deficit for services. Hendri asserts that the Government must immediately implement a plan to develop and support Indonesia’s transportation industry, which is the highest contributor to the deficit for trade in services. Another step that can be taken is to set the tourism sector as a priority as the tourism sector is the highest contributor to the service trade balance.
Thirdly, AEC 2015 will set loose labor flows in the ASEAN region, resulting in an increase in foreign workers. The Government, asserts Hendri, must establish a strategy to anticipate a flood of foreign labor into Indonesia.
Finally, AEC 2015 will encourage foreign investment, both from within and outside the ASEAN region, to enter Indonesian markets. In anticipation of this, the Government must swiftly prepare a strategy and policy for their private sector partners to develop upstream processing businesses for natural resources. This will increase the economic benefits of foreign investments at various levels such as added value to final products, job creation, and the development of upstream industries.
Considering the pressing nature of these issues, Hendri emphasizes that the Government is running out of options other than to immediately draft a strategic plan and coordinate its implementation with domestic businesses.
“There is not much time remaining with only one year left. We have to hasten intelligently,” concludes the economist.
Sofjan Wanandi, Chairman of the Indonesian Business Association (Apindo), believes that Indonesia will likely experience difficulties in facing the imminent start of AEC 2015, partly caused by the Government being distracted by political matters related to the upcoming general election in 2014.
Preparation for AEC 2015, according to Sofjan, has been left neglected to gather dust. He further asserts that recently established incentive policies are not being properly implemented by the Government.
“The Government has issued a lot of incentive policies but their implementation is not functioning. They’re only mere promises,” he concluded.
(hot/kc)
Fitri Novia Heriani, Andin Aditya Rahman
The implementation of the ASEAN Economic Community in 2015 (AEC 2015) will bring about further economic liberalization in the region. In addition to trade liberalization, AEC 2015 will also open up the services, capital, and labor sectors to regional liberalization.
Recent doubts about Indonesia’s competitiveness has led businesses to question whether Indonesia will benefit from AEC 2015 or rather end up in a disadvantageous position compared to other ASEAN nations.
Hendri Saparini, Executive Director of the Center for Economic Reform (CORE) notes that AEC 2015 is not the first regional economy liberalization for ASEAN. In 1992, ASEAN entered into the ASEAN Free Trade Agreement (AFTA). At that time Indonesia suffered due to lacking sufficient competitive advantages. Imported products flooded into Indonesia aggravating the national trade balance deficit.
“The Government has stated that Indonesia is 82 percent ready to face AEC 2015. However, this percentage claim of readiness is in fact only based on a checklist which shows how far Indonesia has progressed in implementing agreements under the AEC 2015 framework,” explained Hendri in Jakarta on Monday.
Hendri has suggested four crucial elements that must be properly addressed by the Government in preparation for AEC 2015.
First, the implementation of AEC in 2015 will likely turn Indonesia into a supplier of energy and raw materials. This will result in the benefit of Indonesia’s natural resources going overseas, an undesirable outcome considering Indonesia currently has the highest trade balance deficit of all ASEAN nations. To address this issue, the Government must draft integrated industrial, trade, and investment strategies relevant to the implementation of AEC 2015.
Second, AEC 2015 will worsen the trade deficit for services. Hendri asserts that the Government must immediately implement a plan to develop and support Indonesia’s transportation industry, which is the highest contributor to the deficit for trade in services. Another step that can be taken is to set the tourism sector as a priority as the tourism sector is the highest contributor to the service trade balance.
Thirdly, AEC 2015 will set loose labor flows in the ASEAN region, resulting in an increase in foreign workers. The Government, asserts Hendri, must establish a strategy to anticipate a flood of foreign labor into Indonesia.
Finally, AEC 2015 will encourage foreign investment, both from within and outside the ASEAN region, to enter Indonesian markets. In anticipation of this, the Government must swiftly prepare a strategy and policy for their private sector partners to develop upstream processing businesses for natural resources. This will increase the economic benefits of foreign investments at various levels such as added value to final products, job creation, and the development of upstream industries.
Considering the pressing nature of these issues, Hendri emphasizes that the Government is running out of options other than to immediately draft a strategic plan and coordinate its implementation with domestic businesses.
“There is not much time remaining with only one year left. We have to hasten intelligently,” concludes the economist.
Sofjan Wanandi, Chairman of the Indonesian Business Association (Apindo), believes that Indonesia will likely experience difficulties in facing the imminent start of AEC 2015, partly caused by the Government being distracted by political matters related to the upcoming general election in 2014.
Preparation for AEC 2015, according to Sofjan, has been left neglected to gather dust. He further asserts that recently established incentive policies are not being properly implemented by the Government.
“The Government has issued a lot of incentive policies but their implementation is not functioning. They’re only mere promises,” he concluded.
(hot/kc)