Source: the World Bank
JAKARTA, July 17, 2008 – In Indonesia’s on-going, wide-ranging agenda of reforms, the trade sector has proven to be a quiet success story. The Inaugural World Trade Indicators (WTI) report from the World Bank shows that when compared to countries in the East Asia Pacific region and other countries in low-middle-income category – Indonesia has among the lowest trade tariffs for goods. On the tariff restrictiveness index, Indonesia stands at an average of 4.5% compared to East Asian and Pacific countries at 4.9%, and far lower than the middle-income country average of 8.7 percent. The reform effort it has made in trade policy has put Indonesia in the 50th rank out of 125 countries on the WTI.
More than simply a report, the WTI is an online database that allows policymakers and researchers to compare the trade performance of their respective countries to others based on four key indicators: trade policy, external environment, institutional environment, and trade facilitation – which when combined feeds into a country’s overall trade outcome. One of the principal authors of the report, Gianni Zanini, Lead Economist of the World Bank Institute, recently visited Indonesia as part of a regional road show to launch the WTI. The main event in Jakarta was a presentation at the Department of Trade, in which Zanini shared the key findings of the study and showed what kinds of information could be found on the online database.
Speaking to the press after the presentation, Trade Minister Mari Pangestu underlined that the WTI is not a policy recommendation, but a useful reference tool that could come in very handy for multilateral trade negotiations. “If we want to get low rates, we should negotiate with the destination country,” said Minister Pangestu. “WTO negotiations are very important, especially with India and Brazil. Not just with developed countries.”
A second presentation was also given to key members of the local business community, in a special forum organized by a leading business magazine. This time around Sjamsu Rahardja, Trade Economist for the World Bank’s Indonesia country office, was on hand to highlight what further challenges lay ahead for Indonesia’s trade sector. “There is still much work to be done beyond lowering tariffs. Indonesia is still faced with a number of bottlenecks – there are the ‘old songs’ of corruption, heavy bureaucracy, inadequate infrastructure, and also the new issues like restrictions on foreign investment and rising commodity prices,” said Rahardja in his presentation. “Indonesia must also look to China, India and Vietnam, and decide whether to look at these emerging markets as challenges or opportunities.”
Entries (RSS)