President Prabowo Subianto’s recent announcement on Indonesia’s import policy has sparked widespread debate among economists, business leaders, and local producers. His proposal to eliminate import quotas and technical approvals aims to open the country’s market broadly to foreign goods. While the government sees this as a way to lower prices and increase supply, industry stakeholders warn of serious long-term risks.
Why Indonesia Is Easing Import Rules
During the Economic Forum at Menara Mandiri in Central Jakarta, Prabowo emphasized that restrictive quotas only benefit a select few companies. “I ask, there is the minister of agriculture, the minister of trade, there should be no import quotas at all,” he said. “No more of that!”
He added that removing these limitations empowers all players, stating, “Anyone who wants to import meat, go ahead! Anyone can import. Want to import something? Go ahead! Just open the import doors. Our people are smart.”
This policy shift reflects a belief that open markets will naturally regulate themselves and promote efficiency. The administration argues that by eliminating barriers, they can ensure greater access to essential goods and improve competition.
Public Response to Indonesia Import Policy Changes
The Indonesia import policy overhaul has drawn a mix of praise and concern. Supporters argue that wider import access can lower consumer prices and improve product variety. However, critics warn of significant drawbacks for domestic industries.
Syafruddin Karimi, an economist at Andalas University, cautioned that this policy, if implemented without a robust support system, could backfire. “Small and medium industries that are not ready to compete will be hit hard, farmers will lose markets, and jobs will be at risk,” he told CNNIndonesia.com.
He further warned of broader risks: “Uncontrolled imports could widen the current account deficit and weaken the exchange rate, while also sparking social unrest due to rising unemployment.”
How the New Import Rules Affect Local Producers
Local businesses, particularly those in labor-intensive sectors, could suffer under the new import regime. The removal of quotas and approvals may expose them to cheaper foreign products they can’t compete with on price or scale.
Andry Satrio Nugroho, Head of the Center for Industry, Trade, and Investment at INDEF, highlighted the dangers: “If we let go of the brakes now, this wave of cheap goods could become a tsunami for local industry.”
Industries such as textiles, footwear, and light electronics are already facing large-scale layoffs. An influx of low-cost imports could worsen this trend, leading to more job losses and a drop in consumer spending.
Evaluating Long-Term Effects of Import Changes
Beyond immediate market disruptions, experts stress that unregulated imports could harm the country’s long-term economic health. Indonesia may face a growing trade deficit and a weakened currency, especially if global commodity prices surge.
Karimi also emphasized that reliance on foreign goods undermines national resilience. If local production collapses and global supply chains are disrupted, consumers could face shortages and volatile prices.
Balancing Indonesia Import Policy for Growth
Analysts agree that while import liberalization can improve efficiency, it must be carefully balanced. The government should allow easier imports of high-tech goods, industrial raw materials, and items not yet produced domestically. This would support manufacturing and enhance global competitiveness.
“Import policies must not be based solely on trade pressure or cheap prices,” Karimi stated. “They must reflect a long-term, fair development strategy that supports the people.”
Policymakers must also shield strategic sectors such as food commodities, MSME products, and labor-intensive industries. Without proper safeguards, Indonesia could become overly dependent on foreign products, putting millions of local jobs at risk.
While Prabowo’s proposal seeks to modernize trade, experts urge a more cautious and targeted approach. Striking the right balance in Indonesia’s import policy will be crucial to ensuring sustainable growth without sacrificing domestic resilience.
Source: cnnindonesia.com
Image: Tom Fisk/Pexels
