JAKARTA - The Executive Director of the Center of Reform on Economics (CORE) Indonesia Mohammad Faisal considers industrialization to be one of the important efforts for Indonesia to achieve an economic growth target of 8 percent.
"It is impossible for us to reach higher economic growth without industrialization, and industrialization which is in the government's priority now is (acceleration) of downstream," said Faisal in Jakarta, quoted by Antara, Friday, February 20.
Meanwhile, the final result of the Indonesian-United States (US) trade tariff negotiations is contained in the Agreement on Reciprocal Trade (ART) document.
In general, the US still imposes a reciprocal tariff of 19 percent on imported products from Indonesia.
However, the list of 1,819 tariff posts and textile products that have been identified in the agreement has been granted a 0 percent tariff exemption.
According to Faisal, it is impossible for Indonesia to achieve higher economic growth without industrialization, and the deep industrialization of the government's priority now is (acceleration) of downstream.
Of the 1,819 tariff posts, many of them are commodities such as palm oil, coffee, cocoa, spices and rubber that have not been processed.
According to Faisal, the government needs to be careful because the export of raw commodities can potentially disrupt domestic processing industry activities.
"The current policy is suppressed in this way, so it is certain that this will not be able to achieve the target of higher economic growth, up to 8 percent," he said.
He then compared the final results of the US trade tariffs with Vietnam. Faisal said the Blue Dragon Kingdom received a 0 percent tariff for products from high-value-added manufacturing industries.
"If we compare it with Vietnam, what is being worked on to get a 0 percent tariff is the manufacturing product, especially Vietnam is not just manufacturing, high value-added manufacturing, electronics," said Faisal.
In addition, Faisal also highlighted the policy on the level of domestic components (TKDN) which the US said was quite difficult for export activities to Indonesia.
"But what about the impact on security, safety and also for consumers in Indonesia? Then TKDN is indeed being implemented so that we can encourage industrialization, the national priority agenda," said Faisal.
He reminded the government not to give special exemptions to the US, because it would create the potential for investors from other countries to receive the same treatment.
"If it is then abolished (specifically for) America, this is a bad precedent for other investors who also ask for the same thing. Because in the international trading system, there should be no difference in treatment," he said.
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