Global economic uncertainty still haunts the world economy, the Russia-Ukraine war caused supply chains to be disrupted, so that the countries that were most affected were Europe and America where both countries experienced very sharp inflation rates of 8.5% (yoy) and 5% (yoy). ) these are just a few of the symptoms of the world recession. Export destination countries have reduced demand for secondary needs, especially homeware and apparel. They are more concerned with meeting basic needs, namely energy such as fuel oil and gas.
The Western Bloc's alignment with Ukraine caused cheap gas supplies from Russia to be disrupted, so that western countries bought gas through neutral countries or third parties which led to an increase in the price of basic necessities. In the midst of a sluggish world economy, several Asian countries were resilient because they were not affected by the recession.
For example, Indonesia, which experienced economic growth in the first quarter of 2023, was recorded at 5.03% (yoy) and maintained the lowest inflation rate at 2.94% in March (yoy).
The impact is that many imported products that were previously directed to Western countries are now flooding Indonesia, especially imported textile products (semi-finished and finished clothing). According to data from the Central Statistics Agency, the number of imports of textile products to Indonesia in the last five years has averaged 2.5 million tons, even in 2021 there will be an increasing trend in import volumes of 21.11%.
The flood of foreign products had a direct impact on the condition of the local textile business where many textile industries were closed, efficiency and layoffs were caused by the local market which was already filled with imported products which were much cheaper than local products.
The government lightly scapegoats used clothing or thrifters, which in terms of volume percentage in 2022 is only 8% of the total volume of imported products. Seeing the uncertain global situation, the local or domestic market is the textile industry's only hope to continue to exist.
The government, especially the Ministry of Trade, should make local protection policies by reducing the textile import quota to Indonesia and giving more taxes, so their prices are higher than local products and eradicating illegal routes for the textile import trade.