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Indonesia : Textile quotas - the problem of ''the have and the have nots'' |
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2004-7-30
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An appeal has been sent out to the textile and garment makers by The Indonesian Garment Producers Association (APGI) to pass unutilised quotas to other firms in a bid to push exports.
This was informed by APGI chairman Natsir Mansyur. He added that the Ministry of Industry and Trade would distribute them to other firms once they get the information on them.
"That way we would have a better chance of meeting the quota limit and increasing our total exports," he told The Jakarta Post and Investor Daily on Wednesday.
Natsir said that the utilization rate of the export quota had been very low.
He pointed out as an example that out of the 876,476 dozens of sweaters ordered by the U.S. from Indonesia this year, local manufacturers had so far only been able to export 105,554 dozen, or around 12 percent of the designated quota.
The utilization rate of the export quotas for nightwear and blazers were also relatively low at 16.6 percent and 29.8 percent, respectively, according to data from the U.S. customs office. But the utilization of the quotas for coats and dresses were higher at 58.6 percent and 42.7 percent.
Some analysts say that corruption and collusion between government officials and crooked businessmen have contributed to the problem of low utilization, as some of the quota holders have no textile or garment factory at all. The well connected people act as rent-seekers trading their export quota to authentic textile companies.
According to data from the Ministry of Industry and Trade, 18.41 percent of the listed textile and garment exporters in 2001 had no factories at all.
Luky said that many companies could not replace their aging machinery as they had been saddled with huge debts and poor cash flows.
Textiles and garments was one of the country''s main non-oil and gas export products prior to the financial crisis. The government estimates that textile and apparel exports to increase to US$7.5 billion this year from $7.03 billion last year. |
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