Selasa, 30 April 2013

HIGH COST ECONOMY IN INDONESIA


Implementation of the ASEAN - China Free Trade Area (ACFTA) can be regarded as an opportunity for the domestic industry to expand into China and Southeast Asia markets. However, this argument is questionable because in reality the competitiveness of Indonesian domestic industry is still relatively lower when compared with China and ASEAN member countries another.

Based on the analysis of the Ministry of Industry, the competitiveness of industrial products and manufacturing Indonesia to ASEAN countries only 15% who have a strong competitive edge and nearly 60% of the products have weak competitiveness. Another case against China, the competitiveness of Indonesian products that are strong only 7%, remaining competitive are 29% and 55% weaker.

So, what exactly is the cause of the low competitiveness of Indonesia when compared to China. Mari Elka Pangestu, Minister of Trade, Republic of Indonesia, in an interview has said that competitiveness or competitiveness is determined by many factors, including external and internal factors Own external factors closely related to competitiveness and comparative advantages of other countries who became Indonesia's competitors.

For example, X products made ​​in China that have very cheap prices and huge production scale is difficult to rivaled by Indonesia, making Indonesia the low competitiveness of the product X when compared with China.
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