INDEF: Unclear Sugar Import Procedure, Declining Competitiveness

INDUSTRY.co.id - Bima Yudhistira, an economist of the Institute for Development of Economics and Finance (INDEF), said that the imported sugar tap opened by the government has very little effect on small industries.

"What benefits from the import of refined sugar is large industry, for small industries there is no effect," said Bima told INDUSTRY.co.id in Jakarta, Sunday (11/2/2018).

According to him, the government is currently confused as to which side, because talking about the sugar problem will affect the food and beverage industry, while the UMKM industry is also increasingly confused.

"As long as the sugar import trade regulation is still unclear and does not give a side to small industry players, so long as it will decrease competitiveness," he explained.

Furthermore, Bima said, judging from the latest data shows how the large medium-sized industries tend to increase, while small industries experience sluggishness. It is undeniable that the flood of sugar imports makes sugarcane farmers increasingly plummeted.

"We have sugar production but we import refined sugar, this means there is a problem in the production of sugar," said Bima.

In addition, another problem is the investment to revitalize machines in the sugar industry was not done. According to him, the concrete solution is the government should provide incentives or cheap credit specifically for revitalization of the machine.

For example, Bima continued, the government should create a package of incentives which are specifically for the revitalization of the sugar industry machinery and provide cheap loans such as the People's Business Credit (KUR).

"If our sugar industry is still running in place like now and even tends to decline during that we will be stuck on imports," said Bima.

Bima suggest to the government to think first before opening the imported faucet. In addition, there must be a firm rule related to sugar imports that may be imported to the needs of industrial sugar on the condition that supervision is tightened and the obligation of importers to build sugar factories in Indonesia.

"If they are forced like that they can finally enjoy the margins of sugar imports, but if they are forced to set up a factory it means they have to absorb local sugar production," said Bima

"In the future we can self-sufficiency in sugar, for now we have no plan to self-sufficiency sugar, but sugar is one of the strategic commodities and contributor of inflation," he said.

As is known, the Ministry of Trade (Kemendag) has given permission to import refined sugar as much as 1.8 million tons to meet the needs of the domestic food and beverage industry. The import of sugar will be done by 11 domestic refiners who are members of the Indonesian Refined Sugar Association (AGRI).

Permit for importation of refined sugar was published by the Ministry of Trade after receiving recommendation from the Ministry of Agriculture.