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November 21, 2024 | 03:32 pm
TEMPO.CO, Jakarta - A team of economists at state lender Bank Mandiri uncovered a discrepancy in the recorded imports of garment and textile products from China to Indonesia between 2004 and June 2024. According to Trade Map data, the actual imports may be as much as double the official figures, amounting to an estimated US$265 million or approximately Rp4.2 trillion, with an assumed exchange rate of Rp15,916 per US dollar.
“This gap is relatively substantial, roughly double the recorded imports by BPS (Central Statistics Agency),” said Dendi Ramdani, Department Head of Industry and Regional Research at Bank Mandiri, during a virtual press conference on November 20, 2024.
In 2023 alone, the unrecorded imports amounted to US$560 million or approximately Rp8.9 trillion. Dendi attributed this situation to illegal imports and smuggling activities. “There needs to be serious handling by Customs, Bakamla (Maritime Security Agency),” he said.
The Ministry of Cooperatives and Small and Medium Enterprises has also identified similar issues. Temmy Setya Permana, then Acting Deputy Minister for Small and Medium Enterprises, noted a disparity between China's export data to Indonesia and Indonesia's import data.
“There's a significant difference in the HS Code for finished garments (61-63). China's export data to Indonesia is nearly three times larger than Indonesia's import data. We suspect that some products are entering the country illegally and going unrecorded,” Temmy explained at the ministry’s office in Jakarta on Tuesday, August 6, 2024.
Temmy mentioned that these illegal imports could lead to job losses and economic damage. He estimated that the industry could lose up to 67,000 jobs and Rp2 trillion in annual wages, as well as a potential GDP loss of Rp11.83 trillion in the textile and garment sector.
The Ministry of Cooperatives and Small and Medium Enterprises has recommended imposing a 200 percent Safeguard Import Duty (BMTP) on textile products, particularly finished garments, accessories, and footwear, to protect domestic industries.
Cicilia Oca contributed to the writing of this article.
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