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Indonesia and self-reliance

Updated On: Dec 22, 2008

Critics have started zeroing in on Jakarta’s newly enforced health regulations and a late October 2008 Trade Ministry regulation imposing new restrictions on importers of processed food as non-tariff barriers that impede free trade.

This was seen in some quarters as protecting Indonesia’s domestic market by enforcing the implementation of the Indonesian National Standard to obstruct imports. This took place against a backdrop of calls for self-reliance and campaigns to buy local products.

Indonesia is gripped by nervousness about export-oriented countries dumping their excess production into Indonesia as demand in the developed world slows down. This is backed up by the Indonesian business lobby who are keen to refocus their sales in Indonesia as their traditional export markets dries up.

Politically, this seems to be expedient thing to do as Indonesian politicians, especially those the ruling government are gearing up for the 2009 elections and protecting jobs in Indonesia is seen as extremely important. This is coupled with growing support for shifting away from being an export-oriented economy and develop its own economy based on indigenous resources.

Also using health concerns as a cover, especially after China’s melamine scandal, the autonomous Food and Drug Monitoring Agency (BPOM), originally a component of the Ministry of Health, has come under fire for not monitoring food products.

China’s tainted food products provided the perfect cover for Indonesia to limit packaged food imports and to control the way local retailers package foreign-proceed food products.

Sources:

Hassan, Hazlin, “Malaysia unveils measures to avert economic slowdown” dated 15 November 2008 in The Straits Times (Singapore: the Straits Times), 2008, p. C18.

McBeth, John, “Self-reliance the current reform” dated 20 December 2008 in the Straits Times (Singapore: The Straits Times), 2008, p. A28.







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