Observer: Revision Of Export Result Foreign Exchange Rules Must Be Accompanied By The Implementation Of Strict Sanctions

Foreign Exchange Illustration (Photo: ANTARA)

JAKARTA - The government plans to revise Government Regulation (PP) Number 1 of 2019 concerning Export Result Foreign Exchange from Business Activities, Management and Natural Resources Processing (SDA) in order to be in line with export growth with foreign exchange reserves.

Economic observer from the University of Indonesia Yusuf Wibisono, supports the government's move to revise the Export Results Foreign Exchange (DHE) regulation. However, he gave several notes related to the plan, one of which was the application of strict sanctions.

"Adding sectors that are required to bring home DHE not only SDA but also other sectors including manufacturing, that's fine. But it will not solve the problem as long as the DHE policy is just recording DHE has been placed domestically with sanctions that tend to be light, generally only administrative sanctions," said Yusuf, Saturday, January 14.

According to him, many DHEs do not return to Indonesia because entrepreneurs hold their dollars for various reasons. "Entrepreneurs need foreign exchange for their import needs, to pay off foreign currency debt and also to anticipate due to concerns over the uncertainty of the foreign exchange market. Even the hold dollar position is a favorable choice for speculation," said Yusuf.

While the clearest factor, Yusuf said, is the interest on dollar deposits which are much higher in foreign banks than banks in Indonesia. This is ironic and looks immoral because the DHE of the country's natural wealth is used for personal gain, even with people's losses from Rupiah's instability," said Yusuf.

For this reason, the Director of Indonesia Development and Islamic Studies (IDEAS) considers that structural reforms can be done by the government. Namely, reforming the free foreign exchange system. "We should have started implementing DHE repatriation obligations and DHE conversion obligations to the Rupiah, there is no need to say for example 50 percent. So on the one hand, the uncertainty of the foreign exchange market can be suppressed with adequate Dollar supply, but on the other hand, the DHE holder entrepreneurs also still have a significant amount of DHE, "concluded Yusuf. Previously, the Coordinating Minister (Menko) for the Economy Airlangga Hartarto, said that the revision of the PP related to the DHE from the SDA processing was carried out to follow up on the direction of President Joko Widodo (Jokowi). "Earlier, the President's direction was that exports that have been continuously positive need to be followed by increasing foreign exchange reserves. Therefore, the president asked PP 1/2019 on the foreign exchange results to be improved," said the Golkar chairman.