Indonesia ‘Not Ready’ for Asean Free-Trade Zone, Minister Says
Faisal Maliki Baskoro
When Gita Wirjawan became trade minister, the first thing he did was send 1,200 employees on a three-day crash course to improve their English proficiency.
This was a part of a capacity building program to prepare Indonesia ahead of a free trade era, the Asean Economic Community, which will commence in 2015.
“Right now, we’re not ready to face AEC. I’ve raised this issue several times at cabinet meetings but our awareness is still low,” Gita said on Thursday.
He said that many government institutions at both the central and regional level had yet to properly train their employees to prepare for liberalized investments and the open trade of goods and services among Asean nations.
“I put up an Asean flag in my office but I don’t see that in other departments. This is indicative of the low awareness toward Asean issues,” he said.
Gita added that Indonesia should be wary of the free flow of labor coming into the country, as labor costs in Indonesia are likely to continue to rise.
“What will happen if people from other countries flock here willing to work for cheaper wages compared to our local labor? We need to be prepared,” he said.
Natsir Mansyur, deputy chairman for trade distribution and logistics at the Indonesian Chamber of Commerce and Industry (Kadin), said that there is much to be done ahead of the AEC.
“Ready or not, the AEC is coming, and we’re not ready yet,” he said.
He said that there was still time to improve infrastructure, the national logistics system and the labor cost structure ahead of the AEC.
“Human-resources wise, we’re ready to compete. But there’s much to be done to prepare us for the free-trade era,” he said.
Establishment of the AEC in the mold of the European Union will create a combined economy of more than $1.13 trillion in a market of 600 million people.
The AEC will liberalize trade and the movement of skilled labor and capital within the 10-member region, which includes Cambodia, Laos, Thailand and Vietnam, among others.