Indonesian Industry Ready for AEC 2015

Rabu, 31 Juli 2013 | 09:08

The government claimed that 83% of Indonesia’s economy and industry is ready to face Asean Economic Community (AEC) in 2015. Deputy Minister of Trade Bayu Krisnamurthi said the government will continue to identify the readiness of various industries. Thus, Indonesia’s economy and industry is entirely prepared and included into Asean trade standard.

He admitted that several industries haven’t complied with trade standard in AEC, among others, are food, pharmaceutical, and herbal. However, there are few others who already meet the required standard that enables them to compete with products from other countries.

Cable and electrical manufacturing is considered the most ready and have meet the Asean manufacturing standard.

“For cable, Indonesia is absolutely ready and able to compete in AEC 2015,” he said during work visit to PT Supreme Cable Manufacturing Commerce Tbk, Monday (7/29).


Despite having high specification, the trade balance of Indonesia’s electrical product including cable is still deficit. As the matter of fact, the exported product in 2012 was only around US$7 billion, in which US$2.6 billion for Asean, while imported electrical product in Indonesia reached US$15 billion.


According to him, such trade balance deficit occurred due to high demand for cable in Indonesia following the project of 10,000 MW power plant as well as fulfillment of electricity from many building constructions.


"The deficit is not because we are not competitive but rather due to very high domestic demand. Moreover, the imported products include generators that are not produced in Indonesia," he said.


Such condition becomes a challenge and an opportunity for business players to keep increasing production so that such large business opportunity can still be enjoyed by the entire cabling industry in Indonesia.


Therefore, the government encourages local companies to keep expanding their business since in terms of quality and scale our companies are able to compete with other countries’ production. "Otherwise, foreign investor will see this vast market as an opportunity to enter to Indonesia."


Meanwhile, Chairman of Factory Association Noval Jamalullail said the local industry has not been strong enough to compete with Chinese products, causing several factories was shut down in the last 3 to 5 years.


"Nevertheless, the factories didn’t shut down due to unable to compete but because of the absence of the Indonesian National Standard (SNI). Now, with the implementation of SNI, the cable production from the local industry can be encouraged," he said.


Moreover, he also regretted that although Indonesia is a copper and aluminum producer, yet it still imports the products as the demand fulfilled by local are still small in number. Similarly, the import duty arrangements should also get attention so that domestic products can still survive amid the waves of the foreign products imported to the Indonesian market.


Separately, Directorate General of Asean Cooperation, Minister of Foreign Affairs, Ambassador I Gusti Agung Wesaka assumes the implementation of AEC in 2015 is a big opportunity for Indonesian SMEs to penetrate Asean market.


He said Asean community prevailing in 2015 will be a big market for creative and innovative national products. “The number of people in 10 Asean countries reach 600 million people, out of the number, 240 million people are Indonesians. Certainly 360 million people is a very big market for our products,” he said.


The big chance cannot be separated from existence of small business units in Indonesia which reach 55 million in number. With such big number of business, this creates big opportunity for Indonesian products to penetrate Asean market.


 The implementation of AEC in 2015 will make the region borderless in terms of cooperating in politics, security, social, culture, and economic sectors.


 He is optimistic that national products can compete with others given that at present a number of national products can penetrate good foreign market, for example B-29 (soap) which sells well in South Africa including drugs from Kimia Farma and Dexa, already entering Cambodian market.


Besides, Indonesia has creative and innovative human resources. New business players also come from campus community. With high creativity and innovation, he is optimistic that national products can penetrate Asean market. (k25/t06/t07/t10/aph/tw)

by Dewi Andriani, Arsyad Paripurna, Aprianto Cahyo Nugroho, Intan Permatasari