Not A DMO, This Is A Policy That The Government Needs To Take To Make It More Auto Money

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JAKARTA - A number of parties have begun to criticize the government's policy regarding the Domestic Market Obligation (DMO) which limits export activities and is combined with the minimum portion of domestic supply.

Rather than relying on DMO policies whose effectiveness is considered doubtful, the government is considered better at focusing on increasing profits from rising commodity prices which have been the mainstay of exports for Indonesia.

"(The DMO policy) Its effectiveness in the field is highly doubtful, in fact it has the potential to distort trade and invite retaliation from trading partners. The government should instead focus on getting more benefits from rising commodity prices that are widely exported," said the Associate Researcher Center for Indonesian Policy Studies. (CIPS), Krisna Gupta, in his official statement, as reported by Antara, Monday, March 14.

According to Krisna, the government's performance regarding Indonesia's tax ratio is in trouble. In addition, the ability of the state to increase tax revenues from commodities, claimed by Krisna, is no longer as high as during the oil boom.

"So we have to think about how to increase the potential profits from increasing commodity prices. The trick is to increase the export duty," said Krisna.

Although the policy does not look ideal, Krisna believes that this approach can be used as a solution that has less distortion than the policy on DMO or export bans. "Meanwhile, the results from the increase in export duties can be used for many things, for example to directly subsidize the community," said Krisna.

Not only that, Krisna also reminded the government to be more active in global cooperation as trade routes to and from Russia and Ukraine are cut off in the global trade arena. This has resulted in trade and commodity traffic between countries being more or less affected. "Obviously the number one priority right now is how to limit the impact of the Russian invasion of Ukraine on Ukraine, the European Union and the world as a whole," said Krisna.