BEHIND THE BORDER ACTIONS AND APECTHE CASE OF INDONESIA

Presented byPos Hutabarat, PhD

Ministry of TradeRepublic of Indonesia

Economies Characteristics

Total Area 1,919,400 sq Km

Number of Islands 18,300

Population (2005) 220 million

Pop. Growth (1990-2005) 1.45%

Unemployment rate (2005) 10.3%

GDP/cap (2005) US$ 1100

GDP Growth (2000-2005) 4.8%

Macro Economic Indicators

GDP Growth (%) 4.9 3.3 3.8 4.5 5.1 5.6

Inflation (%) 9.3 12.5 10.0 5.1 6.5 17.2

Exports (US$ B) 62.1 56.3 57.2 63.3 72.5 76.4

Imports (US$ B) 33.5 31.0 31.3 39.5 48.1 9600

GDP/cap (US$) 740 690 810 970 1030 1100

Indicators 2000 2001 2002 2003 2004 2005

Tariffs

1. Indonesia has adjusted its tariff regime in accordance with the implementation of WTO commitments

2. Most of the tariff lines are ranging between 0% to 10% with weighted average 7.2% in 2005

Non-Tariff Measures

1. Eliminating 98 non-tariff measures by 2004 on the WTO commitment

2. Taking unilateral action to remove NTM’s which are not included in the Uruguay Commitments

3. Releasing import restriction

SERVICES

Indonesia has reformed and deregulated many service sectors, which include financial, retailing and distribution, energy and tourism

Retail and Distribution

1. Allow foreign firm to operate and obtain a business license for trading

2. National treatment commitments for wholesale trade, retailing, convention, market research, and quality certification services

Financial

1. Set up the national financial system

2. Rebuild institutional building and coordinate mechanism of institutions as regulator of national financial system

3. Allowing branch office of foreign bank and foreign ownership in local bank (99%)

4. Allowing joint venture insurance company (99%) and finance company (85%).

ENERGY SECTOR

1. Allowing foreign companies to participate in the exploration of oil and gas fields under production sharing contracts (PSCs)

2. Restructuring electricity sector for transparency and competitive for wide public interest

3. Allowing retail on gasoline industry

4. Allowing joint cooperation contract in coal mining

INVESTMENT

1. Improving transparency in investment;

2. Non-discrimination policy to investors;

3. Allowing full ownership of FDI in almost all sectors;

4. Signing investment guarantee agreement with 57 countries, of which 18 are APEC economies;

5. Comprehensive investment facilitations

Standards and Conformance

1. Alignment of domestics standards with international Standards;

2. Establishment of Indonesia’s guideline on good regulatory practices;

3. Establishment of Indonesian Standardization Society

4. Development of Technical Infrastructure

5. Transparency of Information on standards and conformance

COMPETITION POLICY

1. Promoting competition through enactment of The Law No. 5/1999 concerning The Prohibition of Monopolistic Practices and Unfair Business Competition

2. Establishing and independent Competition Commission (KPPU) in 2000

CONCLUSION

1. Indonesia has made significant progress in all areas of the Osaka Action Agenda to achieve the Bogor Goals;

2. Indonesia continues deregulating and liberalizing the economy to improve its competitiveness;

3. Indonesia is one of the most open economies in the Asia Pacific region