Market guarantee is a major problem in the textile and textile products sector. Secretary General of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI), Redma Gita Wirawasta stated that the government has failed to make the domestic market a guarantee for the local product market and easily provides a red carpet for imported products in the name of providing cheap goods for consumers without thinking of increasing efforts. purchasing power of the consumers themselves.
APSyFI's analysis of the TPT industry growth data sourced from the Central Statistics Agency (BPS) illustrates that the effect of investment on TPT GDP in the last 5 years has continued to decline until only 2.4% remains in 2019 and 2020. Meanwhile, the trade balance has also continued to fall to only 2.4%. 24% of TPT GDP. "If conditions are maintained like this, in the next 5 years our trade balance will only have USD 1 billion left and our growth will always be negative, whereas before 2008 our balance could be above USD 7 billion and will continue to be eroded due to pro-import policies," explained Redma.
This pro-import policy has suppressed investment and the ability to absorb labor in the textile sector. "The government has issued many fiscal incentive policies such as Tax Holiday, Tax Allowance and so on to encourage investment, but if the investment does not have market guarantees, which entrepreneur would like to invest?" said Redma.
The low production utilization due to the continued erosion of the domestic market for imported goods and low investment has also caused labor absorption in the textile sector to be minimal and reducing its function as a labor-intensive sector. "We should immediately realize that the flood of cheap imported goods has been eating away at our economy for years," he explained. "So please reverse the thought, if cheap goods are available from imports, but unemployment is still not resolved, do consumers have purchasing power?" he added.
Then Redma touched on the problem of apparel safeguards which has been hampered in its implication where several parties in several ministries did not agree on the grounds of inflation fears. "Imports are only played by a handful of people, but if it is produced by local industries, then thousands of small and medium industries (IKM) are involved with millions of workers, hundreds of fabric industries with hundreds of thousands of workers are involved, hundreds of yarn industries with hundreds of thousands of employees are also involved, to producers. fiber and its employees are also involved, ”he explained. "Not to mention the series of VAT from upstream to downstream and PPH for companies or their employees from upstream to downstream," added Redma. "So the government wants to select a group of importers or millions of workers and a stimulus for investment," he concluded.
Previously, the Indonesian Small and Medium Industry Entrepreneurs Association (APIKMI) urged that the safeguard policy for garment finished goods be implemented immediately. This is needed because the Indonesian garment IKM players are increasingly depressed by the massive onslaught of imported finished goods from China and Thailand.
APIKMI Secretary General Widia Erlangga admitted that in the past year, all domestic business sectors have been forced to adjust to the conditions of the Covid-19 pandemic. According to him, the government often praises IKM or small and medium industries because they are considered able to survive in a difficult situation like today. However, he continued, the government's statement was considered to be contrary to the current situation that IKM is experiencing.
Chairman of the Organization of the West Java API, Kevin Hartarto, stated that the status of the national textile industry net exporter could change to become a net importer next year if the safeguard is not implemented immediately. "Because the data shows a significant trend of increasing garment imports during 2017-2019," he said.
Kevin explained that half of the tariff posts for garment products show a significant trend of increasing import volume in the last 3 years. "There is even one garment tariff post whose import volume is up to 200% higher than last year," he emphasized. Kevin assessed that the increase in domestic garment imports is due to Chinese garment manufacturers contributing around 25% of the total global garment demand, while Indonesia is only 1 , 7%.
In addition, the Indonesian government has signed a free trade agreement (FTA) with China so that the import duty for Chinese garments will be 0% plus RCEP or ASEAN + 5 which liberalizes our TPT tariffs for 11 neighboring countries. Kevin assesses that the implementation of safeguards is very necessary to save IKM and UMKM because most of the garment production business actors are IKM and UMKM.
"The implementation of safeguards in addition to reducing imports and saving foreign exchange, what is more important is to re-stimulate the creation of many small and medium garment industry players (IKM) and absorb labor," he explained.
In line with API, APSyFI and APIKMI, Executive Director of the Indonesian Textile Expert Association (IKATSI), Riza Muhidin said that currently the government facilitates imports too much compared to domestic products.
Riza explained that the Ministry of Industry's target of import substitution of up to 35% is in line with President Jokowi's direction, and this President's direction must be supported by all agencies under him. "Currently all textile industry stakeholders have one vision to control imports and take sides with domestic producers from upstream to downstream, so all government agencies have to have one voice on the same thing, no longer pro to cheap imported goods," he concluded.