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Indonesian Economic Challenges in 2015
Indonesia is an emerging country that have many potentials to compete in the
international market. Indonesia does have many resources, natural resources is one of
them. Indonesia have many natural resources, but crude natural resources does not have
high value in the market, the resource must be process and become goods. Does Indonesia
have this? No Indonesia not yet reach this level of development. Is this Indonesian only
challenges in the development of the business and economic? The answer is no. There are
more problem that Indonesian will face to overcome the obstacle that block the development
of this country. So what Indonesia’s challenges in 2015 economic? The answer will be
discussed in this resume.
First we will talk about what does the most significant challenge that Indonesia will
overcome in 2015. In my opinion, after reading books and several news, the challenge is the
upcoming Asean Economic Community. It is the most important challenge right now. We
might be thinking is it AEC will hurt Indonesia’s economic. We don’t need to think anymore,
because no doubt that AEC will hurt Indonesia’s economic if Indonesia can’t compete in the
situation. The situation that Indonesia’s will face are:
a single market and production base,
a highly competitive economic region,
a region of equitable economic development.
a region fully integrated into the global economy.
The AEC is an unquestionable inevitability, and more alarmingly, an inevitability
absolutely none of the many hundreds of millions of Southeast Asian citizens have asked
for, voted for, or have any direct say in regards to. So inevitable is AEC’s unfurling in 2015
that few have even bothered to ask “why?” “For what?” and “by whom?”
If AEC’s premise as described by ASEAN itself sounds really similar to the European
Union (EU), that’s because it is the same. It is not only driven by the same immense global
spanning corporate-financier special interests that consolidated Europe’s economies,
currencies, and institutions, but for the very same goal of collectively looting the region if and
when it is successfully consolidated.
The EU now struggling in debt, endless proxy wars fought on behalf of Wall Street and
London, and socioeconomic strife caused by EU regulations ruled upon people against their
will. While it was always difficult for citizens of respective European nations to have their
voice truly represented within the halls of their own respective national governments, it is
more difficult still for the EU’s lead the elite assembled in Brussels to be held accountable
and made to actually work for the European people.
Instead, the EU serves the immense corporate-financier interests that cobbled this
supranational consolidation together in the first place. The European people were not
allowed to vote on entering into the EU, and those that did repeatedly voted against it until
threats, economic extortion, and propaganda finally succeeded in overcoming resistance. In
Southeast Asia, nothing of the sort has even been proposed, and most Southeast Asians are
oblivious to what ASEAN and the AEC even represent. Like the International Monetary
Fund’s (IMF) incursion into Asia during the late 1990’s, it won’t be until catastrophic failure
has already swallowed the whole of Southeast Asia that people begin to realize what has
been grown upon them.
Southeast Asia are already being affected by many FTAs and now the other form of it is
rising This FTAs allow local markets to be flooded by cheap foreign goods. Socioeconomic
disparity, even across Southeast Asia and greater Asia itself can devastate communities and
industries already just barely making do. Special interests driven to ink FTAs generally make
no provisions to prepare local markets about to be devastated, and no provisions after FTAs
take demonstrable tolls. For example we can take from our neighbor Asean country,
Thailand, which had FTAs inked by ousted Thai Prime Minister Thaksin Shinawatra with
China, devastated their local farmers when cheaper Chinese produce flooded Thai markets.
Some farmers including those who grew garlic, were driven almost entirely out of business.
That is just how cruel a FTA can be, and yet another type of it will rise in the shades of AEC.
AEC will absolutely multiply this by creating similar conditions across all industries
and between all of ASEAN’s members nevertheless it is in the small or big scale. Additionally, the AEC then seeks to integrate ASEAN into the greater “global economy,” or in
other words, FTAs with the US and EU. Industries just emerging in each respective ASEAN
member state will be utterly crushed, bought out, or overrun by foreign corporate-financier
monopolies. For local business laboring under the delusions that somehow there is a place
around the “global elite’s” table for them, the current state of the EU should serve as a
cautionary reminder that indeed, no there is not.
In conclusion AEC might exploit the people and the resources of the Southeast Asia
region, but the people cannot even argue about it. Many outsiders that support the AEC is
the one who talking about democracy and human rights, for example America, but the truth
is AEC might just kill the democracy and human rights in an instant.
For this reason, whether one is a conservative nationalist or a liberal democrat, the
idea of an AEC forced upon the people without their input, consent, or even expressed
desire for such a system should be appalling and surely protested against. However, many
must already know that such protests would be futile. But this futility itself only further
exposes the unwarranted influence and power that truly drives the AEC’s undemocratic and
intolerable implementation.
Instead, it will be up to groups within each respective ASEAN member, and up to
each community within to expose, boycott, and replace with local alternatives both the
national and multinational special interests involved. While such a campaign will be difficult,
the only other choice is to do nothing and suffer the same indignation, socioeconomic decay,
and perpetual war the EU now suffers. The people of Southeast Asia have many
advantages including the advantage of time on their side to mitigate a repeat of the EU’s
slow-motion collapse, but it is only an advantage if people begin acting now.
Indonesia will also face all of those condition. The question remain is Indonesia
ready to face these situations? We will see it ourselves in several years, but by judging in the
current situation that happens in Indonesia, this will be the hardest challenge and Indonesia
might not make it. Our country were always weak to confront the outsiders power especially
the financial company which always rule in our regulation and politics. But Indonesia must
realize and confront it now or it might be suffer more miserable condition than our last
recession. The way Indonesia must confront it is towards the policy that can save the local
industry and local economic, but we will talk about it later in the next topic
The second challenge that Indonesia will face in 2015 is global economic slowdown
that happening recently. We must consider this is a challenge because we know that
Indonesia is part of global economic that also actively working in the global market, which
means if there something affect global economic it will affect Indonesia economic too. What
is global economic slowdown? Who is the source? What is the effect? We will discuss this
question on this part.
Global economic slowdown is an event that happens because there are several
event that was lead the global economic being held from growing. The event usually
happens in the country which lead the global market. It was usually when the leading
country economic is failing and it starts to affect the global market. When the economic is
keep failing then the global economic will also slowdown, unless the global market and
economic find a way not to depend on the market leading country.
The reasons of global economic slowdown that happens in 2015 are Oil price that
suddenly drop and the China’s economic slowdown that happen in this first quarter of 2015. This kind of things also affect Indonesia because Indonesia is also do oil tycon and actively
conduct cooperation with China. So Indonesia must acknowledge this event as a challenge.
The oil price will affect the price of Indonesia consumer goods, but Indonesia have
already increase the price before it suddlenly drop. It means there will be an escalated price
but it will be hard to see a falling price of the goods and services. Indonesia also into the oil
production, even it is not really significant industry but it will affect this industry too.
The China economic slowdown affect our economic because Indonesia usually have
ten percent average export to china. The slowdown can make the export rate to china is
also droping or china subtitute the export to another country which more affordable for them
to improve their economic growth.
Evaluation of Indonesia investment and trade policy
We are talking about evaluation of Indonesia policy in trade and investment, but
before do that we must sum up what the base of these policy to be made.National Trade
Policies is made because several reasons. In addition to focusing on the needs of particular
industries, governments may also implement broad policies designed to consider the needs
of the economy and society as a whole. These broad national policies are then followed by
specific industry policies.
There are many trade startegist in the world. We will tak about to know what
strategy Indonesia is into. In many countries, the focus of broad national policies is
economic development. Some countries that depend on a single export commodity will
attempt to diversify their economies to minimize risk.
Some countries will follow an export-promotion strategy as a means of achieving
higher levels of economic development. An export-promotion strategy encourages a
country's businesses to compete in foreign markets by capitalizing on a particular advantage
the country possesses. There are also import-substitution strategy encourages the growth of
domestic manufacturing industries through the erection of high barriers to imported goods.
This policy was used by Australia, Argentina, India, and Brazil after World War II.The export-
promotion strategy has been more successful at stimulating economic development than the
import-substitution strategy.Industrial policy is used by a government to promote the
competitiveness of key products and industries with high growth prospects in international
markets. The policies are formulated based on the needs of the national economy. Indonesia in my opinion is rather an user of export promotion strategy because right now
Indonesia is trying to compete in foreign markets by capitalizing on a particular advantage ,
which is we can make cheaper goods with same quality.
Critics of industrial policy argue that such programs may not improve the global
competitiveness of a country since bureaucrats cannot perfectly identify the right industries
to favor. Critics further suggest that political clout, rather than potential international
competitiveness, may play a role in determining which industries are selected.Governments
struggle to identify what the role of government should be in a market economy. The text
notes, for example, that while the Reagan and Bush administrations believed that
government’s role in the economy should be limited, and thus did not formally adopt an
industrial policy, the Clinton administration believed that the government should play a much
larger role, and consequently selected five key areas to receive increased federal support.
Public choice analysis suggests that special interest will often dominate the general
interest on any given issue because special interest groups are willing to work harder for the
passage of laws favorable to their interests than the general public is willing to work for the
defeat of laws unfavorable to their interests.
Since 2007 up until now Indonesia has made steady economic development with an
averagae annual real GDP growth rate of 5.9%. The GDP per capita is almost doubled into
$3500 and the poverty rate declined to 12.4%.
Since its previous review in 2007, Indonesia has made steady economic progress
with an average annual real GDP growth rate of 5.9%. GDP per capita almost doubled to
almost $3,500 and the poverty incidence declined from a post-crisis peak of 24% to 12.4%
in 2011. These and other solid fundamentals provided good underlying support in the face of
the 2008-09 global recession. Looking ahead, the government's 2011 Master Plan for the
Acceleration and Expansion of Economic Development 2011-2025 recognizes that higher
and sustainable economic expansion requires that the country diversify sources of growth,
accelerate infrastructure development and close the development gap between eastern and
western regions. Real GDP has been forecast by the World Bank to grow by 6.1% in 2012,
rising slightly to 6.3% in 2013, assuming continued strong consumption and investment
growth, supported by a recovery in exports.
Indonesia has taken steps to improve its business environment, which is reflected in
improvements in its rankings in various global indicators. In addition to positive assessments
of Indonesia's macroeconomic climate and FDI regime, some notable reforms include the
launch of the Indonesia National Single Window to facilitate online processing of trade and
licensing activities and the development of initiatives to improve governance.
State-owned enterprises (SOEs) continue to play a key role in Indonesia's economy,
estimated to account for around 40% of Indonesia's GDP. There has not been any
significant privatization activity over the review period. However, the government has
partially divested itself of some of its ownership shares in various industries, including:
cement, telecommunications, mining, energy, pharmaceuticals, construction, highways,
steel, manufacturing, airlines and banks. An SOE monopoly on the importation of alcoholic
beverages was terminated in 2010.
Trade remains limited as a share of economic output, with merchandise exports accounting
for between 21% and 26% of GDP during the review period and imports for between 15%
and 18.5% of GDP. Indonesia continues to trade more energy-related products (fuels) than
any other product category on both the import and export sides. A number of measures -
including export restrictions and taxes on raw resources, tighter import licensing
requirements, point of entry restrictions on imports, ownership limitations on banks and
certain divestment requirements for foreign mining companies - have recently raised
concerns about the direction of trade and investment policy-making. In this regard, the
authorities consider that domestic industrial policy considerations, aimed, inter alia, at
developing local industries and moving up the value chain, should be balanced with
maintaining an open foreign trade and investment regime in order to ensure that Indonesia's
external commitments continue to be fully respected.
Indonesia provides at least MFN treatment to all WTO Members. In order to improve trade
and investment policies, Indonesia has enacted new laws relating, inter alia, to investment,
its SPS regime, export financing, special economic zones as well as in agriculture, fisheries,
shipping, mineral and coal mining and tourism. Indonesia is continuing to strengthen its
economic ties with countries in the region, both bilaterally and through its participation in
ASEAN. Under ASEAN, which is working towards achieving an ASEAN Community by
2015, new goods and investment agreements have recently entered into force.
Indonesia's medium-term trade policy objectives are to increase the export of non-oil
products, strengthen the domestic market and manage the availability of basic products; and
to strengthen national distribution channels. To this end, it has identified ten priority products
of key interest in its trade negotiations. Its economic priorities may also be understood within
the context of various development plans, which aim to increase the competitiveness of
Indonesia's businesses and encourage a shift into higher value-added activities. Central to
this is the economic development of six regional economic corridors, each with industrial
clusters focusing on priority sectors. These corridors would be connected through an
enhanced transport and ICT infrastructure, which is currently poor. The realisation of these
objectives will be dependent to a considerable extent on private investment.
There have been significant legal and institutional changes to Indonesia's foreign investment
regime. A new foreign investment law was enacted in 2007 which represents an
improvement to previous rules by doing away, for example, with maximum timeframes for
investment in permitted sectors and has provisions on national treatment for foreign
investors as well as access to international arbitration. Investment restrictions, including
limits to foreign equity participation, are set out in a comprehensive "negative list" which has
been revised and liberalised over the review period. Foreign ownership is restricted in a
number of sectors which include agriculture, forestry and fisheries; energy-related activities;
communications and financial services and health services. Overall, the 2007 Investment
law offers greater transparency in terms of the sectors covered and a reduction in
administrative burdens.
Indonesia has continued to undertake systematic efforts to reduce constraints to trade,
investment and production and to streamline procedures at the border. Customs reform is
prominent on the government's agenda. This includes the 2007 launch of Indonesia's
National Single Window, which allows for the online processing of customs documentation,
applications for licences, and duty payments. It is now operational at all of Indonesia's ten
main customs entry points, through which an estimated 90% of trade enters and leaves
Indonesia. Efforts are also being undertaken to improve risk management and facilitate
trade by introducing schemes for reputable importers. The goal of customs reform is to
reduce the time and cost of clearing customs and to limit smuggling and customs fraud. The
authorities have observed a significant drop in customs-related appeals as a result of
guidelines issued to assist customs officers to determine the customs value of imported
goods. On the other hand, import procedures tend to be complicated by registration
requirements, port of entry restrictions for several products, and extensive pre-shipment
inspection and import licensing requirements.
The tariff has remained Indonesia's main trade policy instrument, albeit a relatively small
source of tax revenue. Indonesia's revenues from taxes on international trade constitute
around 4% of total tax revenues, which is considerably lower than the average for
developing countries. Nearly half of Indonesia's trade taxes are levied on exports, mainly
commodities, the main policy objectives being price stabilization, development of
downstream processing facilities and reducing the rate of depletion in non-renewable
resources.
The Ministry of Finance concluded a five-year tariff harmonization programme in 2010, which
has resulted in the lowering of Indonesia's simple average MFN tariff to 7.8% in 2012, down
from 9.5% in 2006. The average applied MFN tariff is 7.5% for industrial products and 9.5%
for agricultural imports. More than 85% of tariff rates are currently in the range of zero to
10%. In line with long-standing sectoral support, the highest tariffs apply mainly to motor
vehicles. As has been the case in previous reviews, 95% of tariff lines are bound but at
37.4% the average bound rate largely exceeds the average applied rate, creating a degree
of unpredictability for the tariff. The difference between average applied and bound rates
remains much higher for agricultural products (at 9.5% and 47.1% respectively). With the
exception of a few tariff lines subject to specific rates, virtually all applied tariff rates are ad
valorem, a feature that contributes to the transparency of the tariff. Tariff preferences offered
by Indonesia through bilateral and ASEAN FTAs have resulted in significant tariff reductions,
ranging from 0.8% to 5.9%, thus widening the gap with its MFN tariff rate. In addition to the
tariff, Indonesia levies VAT at a flat rate of 10%, luxury taxes which range from 10% to 75%
and excise taxes on alcohol and tobacco products; for alcoholic beverages with an alcohol
content of 5% or more excise tax rates on imports are higher than on domestic production.
Around 20% of Indonesia's tariff lines are affected by import licensing requirements, which
have been expanded since Indonesia's previous review. Many are in place to implement
policies designed to protect domestic production, such as rice, sugar, salt, certain textiles
and textile products, cloves, animals and animal products and horticultural products. Various
concerns have been raised by WTO Members with regard to the complexity, lack of
transparency and trade-impairing effects of Indonesia's import licensing requirements.
In 2011 Indonesia enacted new rules governing anti-dumping, countervailing and safeguard
measures, with the main changes intended to reinforce investigation procedures as well as
to bring the regulation of trade remedies under one piece of legislation. Relevant institutional
restructuring is in progress. Indonesia has not so far initiated a countervailing investigation.
At end-2012, it had 18 definitive anti-dumping measures in force. Since 2010 Indonesia's
use of safeguard actions has increased significantly, making it the WTO's second most
frequent user of this instrument.
National standards are formulated in accordance with international standards, where
feasible. Indonesia has a transparent approach to the formulation of standards and technical
regulations, which allows for the participation of interested members of the public. During
the review period, new SPS-related legislation has entered into force relating to animal
husbandry and animal health and to horticulture. All imported meat and dairy products must
be accompanied by a halal certificate issued by an approved halal certifying body. Regulations to implement horticultural legislation have tightened up import quarantine
procedures to prevent the spread of fruit fly, which imits the ports of entry into Indonesia for
imports from countries that do not have recognised food safety systems.
Public procurement in Indonesia is undertaken by numerous entities at the central and
regional levels of government as well as by state owned enterprises. Indonesia became an
observer to the WTO Government Procurement Agreement (GPA) in 2012. Government
procurement remains an important instrument of industrial policy. Foreign companies may
only bid in co-operation with a national company (unless no national company has the ability
to provide the goods and services requested) and only on bids that exceed certain
thresholds. Procurement rules mandate the use of domestic products in government
procurement if there are providers offering goods and services with a local content
exceeding 40% of value. Since 2007, transparency in procurement has been improved with
the introduction of mandatory e-procurement for public tenders. New procurement
regulations require each procuring entity to implement stronger management controls and
also set out contracting procedures and timeframes. However, in spite of these reforms, bid-
rigging remains a major problem and accounts for around 70% of the Competition
Commission's caseload, pointing to the need for a comprehensive procurement law and
strengthened audit procedures. Indonesia's competition policy framework has not
undergone any significant change in the period under review.
Support for production and trade has been provided through a variety of incentives for
domestic and foreign investors. These include: corporate tax relief and exemptions; fuel
subsidies; customs duty exemptions; as well as various incentives related to free trade
zones and special economic zones. Indonesia currently has one FTZ in operation. The
Government enacted a Special Economic Zones (SEZ) Law in 2009 to encourage the
development of SEZs as centres of economic activity situated in strategic positions and
encompassing export processing zones, bonded zones, industrial zones, technology parks,
and supporting activities. Two SEZs are currently being developed.
Indonesia has export licensing, prohibitions and restrictions in place to ensure protection of
natural resources and endangered species, provide an adequate domestic supply of
essential products, promote higher-value-added downstream industries, and upgrade the
quality of export products. In addition, the government will prohibit mining companies from
exporting mineral ore products (currently subject to export licensing and taxes) as of 2014,
when they will be required to undertake refining activities onshore. During the review period,
new export taxes have been introduced on leather and wood, palm oil, raw cocoa and
mineral ore products. The main objective of these measures is to encourage value-added
processing within Indonesia. Secondary considerations are to secure domestic supply,
safeguard the environment and raise revenue.
In 2009 the state-owned Bank Ekspor Indonesia, which had provided pre-shipment and post-
shipment financing facilities for exporters was transformed under new legislation into the
Indonesia Eximbank. It provides exporting financing, guarantees and insurance in areas not
entered into by commercial financial institutions, with enterprises in the areas of crude palm
oil, textiles, oil and gas, and mining being among its main clients. Another state-owned
enterprise, Asuransi Expor Indonesia offers export credit insurance to exporters for all
products other than oil and gas.
A net importer of IP-intensive goods, Indonesia has sought to strengthen protection of
intellectual property rights by improving its legal framework. Indonesia is at an advanced
stage in drafting amendments to legislation concerning copyright, trademarks, patents and
industrial designs. Over the review period Indonesia has used compulsory licensing on two
occasions to permit Government use of pharmaceutical patents in order to produce certain
antiviral and antiretroviral drugs: in all instances Government use of these patents is until
their expiry. IPR infringements, particularly with respect to copyright, remain of concern to
Indonesia's trading partners and Indonesia is making efforts to combat IPR violations
through inter alia import licensing requirements and upgraded monitoring and investigation
efforts.
How Government Should use International Cooperation
When nations cooperate, they do so on a voluntary basis and are able to abandon
agreements at will. Global governance, which is understood here as the institutionalisation
of IC, in the ideal case implies regulations aiming to solve global problems through
agreement enforcement and accountability of the actors involved. The most established
definition of cooperation in academic literature is the one by Robert Keohane (1984).
Keohane assumes a conflictive policy situation at the outset of each cooperative agreement. Policy adjustments are then negotiated to bring agreements more in line with each actor’s
preferences. Once both policies become more compatible, the act of cooperation is
completed. But does this definition adequately describe IC across all fields? Also, does it
describe IC in the 21st century? There is evidence that it does not. The actual meaning of
the Latin cooperatio—joint operation—does not require a conflictive policy situation at the
outset. Neither does it require a policy adjustment to the preferences of other actors. For a
joint operation, it is sufficient that two or more actors operate together using shared
resources. Keohane´s definition, written primarily for security issues during the Cold War, no
longer seems appropriate for the wide range of IC in the 21st century. Due to its limitations,
for this essay IC is redefined as follows: Cooperation occurs when two or more actors are
involved in a joint operation with shared resources. This endeavour can be repeated
whenever there is a commitment of all actors. The initial purpose of cooperation can
transform throughout time, but it can also not lead to anything, or result in the complete
opposite intended (cp. Anderson 1999). In some cases, it can trigger new agreements
between governments, which may lead to change in international political relations.
The perspective of holism, the ability to go beyond the simple view of oneself,
understanding the unit as a part of the whole, provides an explanation for this
enlightenment. National governments will want to participate in “steering the boat” of
international politics, without neglecting their self-interest in a leak-less boat because they
necessarily will always be passengers. Therefore, at some point, nations will be ready to
give up a part of their sovereignty to participate in this navigation, submitting themselves to
the resultant enforcement and accountability, thereby enhancing IC and constructing global
governance. This is by no means a linear or automatic process. Examples such as the
integration of the European Union demonstrate that what may seem at the beginning a
utopian illusion (a single currency for all countries) can become real in the end. Even though
the current debt crisis reveals drawbacks of the monetary union, a collapse of the whole
system is unlikely; instead of exclusive national policies further political integration
constitutes a tangible solution. Another example of this non-linear process is cooperation on
climate change. Whilst there have been several steps back on the ladder of IC on
environmental issues, such as the refusal of the United States (the world’s top CO2
producer) to sign the Kyoto Protocol,(10) the achievement of committing 191 countries to the
mandates of the agreement itself is remarkable. These examples portray the trial-and-error
nature of constructing global governance, in which the experiment of IC constitutes a
stepping-stone to a world government.
Indonesia will also face the utopian illusion condition even not in one currency but, in
diffrent aspects it is simillar to EU. It is called AEC, and Indonesia must make a agood
choice of action to make this cooperation become the advantage, not disadvantage not only
for the sake of economic but also the sake of people prosperity. It means Indonesia must
make a suitable cooperation with our current sittuation with another country to make
Indonesia have advantages in this. Even EU is a bad example of this kind of international
cooperation but at least Indonesia now can learn from what EU fault. Indonesia dont need to
be affraid about AEC, but Indonesia must take advantages of by carefully use it and adapt to
Indonesia’s condition.
Indonesia government is already have many policy towards international
coorperation. This policy must use to make advantage in Indonesian economic. With a
population of almost 200 million people on 13,667 islands, Indonesia is the world's largest
archipelago located between the continents of Asia and Australia, and between the Pacific
and the Indian Oceans. Only 35% of the population live in urban areas, but there are more
than thirty cities with 100,000+ population. Plus, five cities have a population of over one
million. Indonesia should consider that government must use international cooperation to
improve this kind of situation.This means Indonesia should consider the international
cooperation more to the non- urban situation or any necessary means to improve the
condition of Indonesia that suitabale in this condition.
Engaged in creating, improving and managing a production base for irrigation
facilities, improving the securing and usage of agricultural production materials such as
seeds and fertilizer, and cooperation that looks at the whole value chain including
processing, distribution and sales, and it is deploying assistance with the objective of
improving the capacity to provide a stable supply of food is one of kind cooperation need to
do because Indonesia really need to improve the agriculture industry and all that kind of
agricultural improvement by using international cooperation is seriously needed.
The development of agricultural technologies based on sustainable management of
environment and natural are necessarily needed in Indonesia because Indonesia is one of
the country that gettiing paid to reserver our environtment. It is need to be done not only
because Indonesia is paid to do that, but also for the continuation of the whole world and the
global warming event that recently become and importan issue. Technology development
for increased productivity and stable production of agricultural products in the tropics
environments; technology development for income and livelihood improvement of the rural
population in developing regions; and collection, analysis and dissemination of information
for understanding trends in international agriculture, forestry and fisheries is also seriously
needed in Indonesia. Cause this one of Indonesia advantages, and Indonesia must realize
to use this.
Indonesia does not need another new International cooperation in importing food
supply because actually Indonesia have a lot of resources to make sufficient food stock but
Indonesia never realized to develop it. If Indonesia make antoher import cooperation then it
is just the same that Indonesia make new gap in economic development that will slow down
the progress.
The need for international cooperation in fisheries management in Indonesia is also
really needed because Indonesia not yet optimize this kind of industry sector.It is also driven
by the highly migratory nature of many of the targeted and bycatch species and the
exploitation of common resources outside areas of national jurisdiction, on the high seas. The sea of Indonesia is also recieve the sama exploitation as the forest, and it must be
solved as soon as posisible. International cooperation is the right answer of this. We can
cooperate with another nation that have a better fisheries industry and get a lesson from
them.
Regional fisheries management organizations (RFMOs) play a critical role in the
global system of fisheries governance. They are the primary way to achieve cooperation
among fishing nations, which is essential for the conservation and effective management of
tuna and tuna-like stocks that cross national boundaries. Through these organizations, the
International Fisheries Division aims to promote international cooperation to achieve
effective and responsible marine stewardship and ensure sustainable fisheries management
globally. Domestic management is guided by our efforts and participation in these regional
fisheries management organizations. Indonesia need to joint this kind of cooperation or
organization, or at least have a cooperation with one of the member of this organization or
any simillar organization that have better management in fisheries.
The Agreement between the Government of Australia and the Government of the
Republic of Indonesia Relating to Cooperation in Fisheries (1992 Fisheries Cooperation
Agreement) provides the framework for fisheries and marine cooperation between Australia
and Indonesia, and facilitates information exchange on research, management and
technological developments, complementary management of shared stocks, training and
technical exchanges, aquaculture development, trade promotion and cooperation to deter
illegal fishing. Cooperation under the Agreement today takes place under the auspices of
the Working Group on Marine Affairs and Fisheries.
Established in 2001, the Working Group on Marine Affairs and Fisheries is the
primary bilateral forum to enhance collaboration across the spectrum of marine and fisheries
issues relevant to the areas of the Arafura and Timor seas. The Working Group brings
together the fisheries, environment and scientific research portfolios and agencies from both
countries. DAFF takes the lead for Australia and the Ministry of Marine Affairs and
Fisheries for Indonesia. The Working Group meets annually.
In 2010 the Working Group agreed to:
Continue work on developing and implementing measures to deter and reduce illegal
fishing activity
Enhance fisheries management, conservation and research (including in the area
known as the MOU Box, see below)
Continue training and capacity development programs
Continue developing seafood quarantine and safety processes, and
Consider mechanisms to further enhance cooperation on marine environmental
issues.
A major initiative under the Working Group is the joint conduct of the Public
Information Campaign in eastern Indonesia delivering information to coastal fishing
communities about the serious impacts of illegal fishing and the consequences fishers face if
caught fishing illegally in Australian waters.
Indonesia - Australia Fisheries Cooperation is one of the example of the cooperation
needed by Indonesia, but Indonesia need more suitable cooperation, because up untill know
Indonesia still not yet optimize the fisheries even with the help of Australia. It means
Indonesia need more help or need an expert help.
In recent years, Indonesia has done well in domestic-focused manufacturing but has
lost its edge in manufacturing for export. It means Indonesia also need to improve the
manufacturing industry so it can be more competitive in global markets. Indonesia has come
a long way since the 1997-1998 Asian financial crisis and has shown a capacity for
managing the many shocks that have confronted it since. It even came through the 2008
global financial crisis relatively well. Moreover, the sharp depreciation in the rupiah last year
has been partly reversed as the nation’s external accounts have improved, allowing foreign
reserves to surge once again. Nevertheless, manufacturing has been held back by a few
major structural problems.
First, Indonesia’s infrastructure development remains poor,a common complaint
among private investors ,due to under-investment. Then, Indonesia suffers from widespread
corruption, as shown in the annual perception index of the Berlin-based Transparency
International. Third, its labor legislation needs to be made more flexible, as Indonesia
currently provides overly generous provisions for employment-termination and faces
frequent labor strikes. Furthermore, there is a problem of structural unemployment where
there is a mismatch of labor skills to the available jobs.
All these issues translate into Indonesia’s underperformance in the competitiveness
rankings. A lack of competitiveness means losing vital export business and becoming less
attractive for foreign direct investment (FDI), both of which are needed to revitalize the
manufacturing sector. In the World Economic Forum Competitiveness Index, Indonesia is
ranked 38th compared to Singapore’s second place and Malaysia’s 24th. Furthermore, in
the World Bank Doing Business Indicator, Indonesia is ranked in 120th place compared to
Singapore’s first-place ranking and Malaysia in sixth place.
In the early 1980s, Indonesia accounted for more then 24 percent of ASEAN’s total
exports and almost 6 percent of Asia’s exports, on average. However, in recent years, its
share has fallen by more than half, to about 12 percent and 3 percent, respectively. While
Indonesia’s manufacturing sector has stagnated, countries like Vietnam have industrialized
rapidly, catching up or even overtaking Indonesia. Furthermore, Indonesia’s ability to attract
FDI has diminished. Once commanding an average of 21 percent of Asia’s FDI between
1971 and 1980, its share dwindled to an average of 1 percent over the past 10 years. Its
failure to attract FDI is a major setback, as FDI is vital to jump-starting Indonesia’s economy,
climbing up the value chain and improving competitiveness.
Partly as a result of the lack of manufacturing-sector growth, real GDP growth
continues to underperform its pre-1997 rates, when Indonesia was lauded as an “Asian
Tiger” and vast numbers of Indonesians were lifted out of poverty. This has had a direct
impact on the welfare of the common citizen. Furthermore, real gross national income (GNI)
per capita is still very low compared to that of Indonesia’s neighbors, which indicates the
country still has much catching up to do. While its poverty rate has improved since 1990, it
still sits at 10 percent and is higher than the poverty rate in Vietnam. According to the UN
Human Development Index, Indonesia is ranked 121st, far below the median, behind
countries such as Thailand, the Philippines and China. If Indonesia fixes its structural
problems, it could realize its growth potential and achieve much more than it has to date.
This means Indonesia is also need international cooperation to improve this
manufacturing industry. International cooperation can help Indonesia optimize this sector
and make Indonesia manufacturing industry once again compete in the global market. Importing goods and technology may be help for today’s economy for Indonesia, but
Indonesia must realize that it can never relying on other countries technology and goods to
survive. Indonesia cannot remain as a consumer forever, and must step forward to become
the producer also. In making international cooperation to develop this industry, Indonesia
will make more inovative technology and good. It means once again Indonesia can compete
in the producer market
After considering about how government should use the international coopertaion,
we can conclude one thing. That thing is the need of an international cooperation in
developing most potential industries such as agricultute, fisheries, and manufacture. By
developing this industries, Indonesia can once again compete in the global market and AEC
wont be a nightmare for Indonesia. When these industries is developed, another sector of
industries will also growing. It is because of the economic will grow from the support of the
developed industries, and by the growth of the economic other industries will also grow
simultaneously.
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