President Joko Widodo, commonly known as Jokowi, is taking measures to tighten the importation of various goods, including clothing, cosmetics, pharmaceuticals, electronics, children’s toys, footwear, textiles, traditional medicines, health supplements, ready-made clothing, accessories, and bag production. This import regulation decision is driven by the need to address the influx of imported products that have been negatively impacting domestic industries.
Airlangga Hartarto, the Coordinating Minister for Economic Affairs, emphasized the government’s commitment to curbing the import of specific commodities. These commodities encompass a wide range of consumer and industrial products. The motivation behind this initiative is to protect local industries and create a more level playing field.
One of the key concerns that prompted this action is the proliferation of imported goods in traditional markets and the growing presence of foreign products in e-commerce platforms. This phenomenon has disrupted the domestic market, posing challenges for local businesses, particularly small and medium-sized enterprises (SMEs).
UMKMs (Usaha Mikro, Kecil, dan Menengah), which translates to micro, small, and medium-sized businesses, have found it increasingly difficult to compete in a globalized market. Their operations are often at a subsistence level, primarily meeting local household demands. The lack of competitiveness in terms of product quality, pricing, and branding has hindered their ability to expand beyond domestic boundaries.
The consequences of this import surge include layoffs in industries such as textiles and a surge in the illegal import of second-hand clothing, which further threatens the domestic market.
To address these challenges, the government is making a significant move to tighten the import of goods in various categories. Additionally, several items previously subjected to post-border inspections will now be transferred to the border, which has implications for customs and trade regulations. This shift is part of a comprehensive effort to regulate the importation of products and enhance oversight.
The implications of these measures are twofold. On the one hand, they aim to protect and revitalize domestic industries by reducing the influx of cheaper foreign products. On the other hand, it is part of the government’s strategy to align with its commitment to promote the growth of UMKMs, not only in terms of their operations but also their competitiveness on a global scale.
In response to these actions of import regulation, the Minister of Cooperatives and SMEs, Teten Masduki, recognized the challenges that local SMEs face. The limitation of resources, basic tools, and rudimentary business models have hindered the potential for SMEs to thrive in a globalized economy. Therefore, addressing these structural issues is essential for the long-term sustainability of local businesses.
The focus on protecting local industries while ensuring that Indonesia’s economy benefits from its domestic production is a complex task. It involves not only regulatory changes but also a deeper commitment to building the capacity and competitiveness of local businesses.