R.I. to apply tariffs of 7.5%

[Davita]

News from Sri Mulyani's office is she will apply 7.5% tariff on 500 imported goods including those bought over the internet. However, she doesn't say what are those 500 items.
If anyone finds a list of the imported items please post here for members to see what will cost 7.5% more than before.....

"Finance Minister Sri Mulyani Indrawati said on Tuesday (14/08) that the government was prepared to take "strict corrective" measures to control Indonesia's swelling imports, as policy makers scrambled to contain a slide in the rupiah currency.

The minister said a 7.5 percent import tariff would be applied to 500 consumer goods, including those bought online, in a bid to curb imports."

 

[Edward]

A small point admittedly, but prices won't necessarily rise by 7.5% after a 7.5% tariff.

 

[Davita]

A small point admittedly, but prices won't necessarily rise by 7.5% after a 7.5% tariff.

That is true from a consumer perspective but it isn't what I said.
If the Gov't puts a 7.5% hike on those 500 products then the cost will be 7.5% more. Many members are also in business in RI and therefore will have to either absorb the increase or pass it, or part of it, on to their customers.
My question was to find what those 500 items are.

 

[Edward]

The recent fall in the value of the rupiah hasn't helped businesses (and consumers) either. I wonder what the new Samsung Note 9 will price at in rupiah?
I can't help you with the list.

 

[El_Goretto]

The recent fall in the value of the rupiah hasn't helped businesses (and consumers) either. I wonder what the new Samsung Note 9 will price at in rupiah?
I can't help you with the list.

13.5jt. But there are promos where you get cash back and a TV bringing the price to around 10jt.

 

[Edward]

13.5jt. But there are promos where you get cash back and a TV bringing the price to around 10jt.

I guess that could include the new tariff?

Here is something relevant in Indonesian language. It seems Uno and Sri are on the same page. (from 13 hours ago)

https://nasional.kompas.com/read/20...iah-melemah-karena-impor-ini-kata-sri-mulyani

 

[Davita]

I guess that could include the new tariff?

Here is something relevant in Indonesian language. It seems Uno and Sri are on the same page. (from 13 hours ago)

https://nasional.kompas.com/read/20...iah-melemah-karena-impor-ini-kata-sri-mulyani

Thanks for the link Edward. It allows a translation and indeed indicated that they haven't yet identified those imports that will be affected.... so still a work in progress.
What is obvious is that they intend to apply the 7.5% tariff, probably immediately, on all consumer products bought over the internet from non-RI sources.

 

[nd_eric_77]

The recent fall in the value of the rupiah hasn't helped businesses (and consumers) either. I wonder what the new Samsung Note 9 will price at in rupiah?
I can't help you with the list.

Samsung has local assembly factories, hence its products are not subject to tariffs. I am not sure about the implications regarding imported components, but they are likely not subject to tariffs either since tariffs seem to focus on finished products.

 

[Davita]

Today the Bank of Indonesia upped the interest rate another 0.25% in an effort to prevent further sliding of the rupiah...so far they have spent millions of US$ supporting it and it hasn't worked.

edit...should be billions of US$
http://www.thejakartapost.com/news/...aises-key-rate-by-25-bps-to-5-25-percent.html

 

[dafluff]

The tariffs I feel are a joke. First of all, it will slow down the economy. Second, a lot of the imports are raw materials, used for goods to be exported. At best it is a band-aid fix.

The slide in the rupiah is mainly caused by foreign capital leaving. Foreign capital is leaving because uncertainty in the global economy, and a strengthening USD. You can't help the latter, but the first can be mitigated. Short term by increasing interest rates, and medium to long term by focusing on more permanent direct foreign investment.

The foreign investment in Indonesia recently has been in financial instruments (bonds, stocks), which can leave at anytime, and it is doing so now. Instead the government should be courting investment in terms of capital expenditures (building factories, for example), where the capital can't leave Indonesia quickly. Of course foreign investors are not excited to spend capital in Indonesia, due to reasons we already know about (red tape, hostility towards expats, irrational nationalistic tendencies, etc). I doubt this is going to change soon.

Another reason is the widening current account deficit. A major way to solve this is to reduce subsidies (fuel, gas, electricity). Not gonna happen in an election year, probably not gonna happen even in a regular year.

 

[Daniel50]

Turkey.........Brazil.......Malaysia.........Indonesia.........Who knows..........?

 

[centurion]

The US is pulling back dollars as well, and this combined with increased interest rates and widened US deficit financed by new bonds is creating a shortage of dollars worldwide putting pressure on developing countries from Argentina till SEA. Indonesia cannot do much than raising the interest rate for now.

Indonesia is hungry for foreign investments but FDI will not increase anytime soon, especially because of red-tape and active obstruction from the mid-up levels of the bureaucracy that is actively against Jokowi`s reform agenda.

 

[Scooterindo]

Did anyone see the coconuts news about the police hunting down the joker who spread the news on social media that Jokowi and Sri Mulyani were going to sell Bali to offset Indonesia's foreign debt. I thought it was quite funny however now the police have got their knickers in a twist over the matter and had a major sense of humour failure.

 

[jukung11]

According to this article there was a 60% spike in consumer goods imports:

https://www.indonesia-investments.c...g-monthly-trade-deficit-in-july-2018/item8944

They went from approximately $1 billion in consumer goods to $1.7 billion. I assume that the goods they will tariff are similar goods. I would still love to see the list.


https://www.bps.go.id/pressrelease/...r--naik-62-17-persen-dibanding-juni-2018.html

The current account has been higher multiple times. Either the currency is extremely inelastic or this is just window dressing. A .07% change in consumer spending shouldn't make a bit of difference in the exchange rate. I wonder if some of the measures against trade and foreigners to protect the country from another financial crisis have contributed to the fall of the currency.

What the articles don't talk about is the fall in production for oil and gas exports and increase in imports. Is there a problem at Pertamina?

 

[centurion]

First, Pertamina took over fields from foreign companies after contracts lapsed and this is the outcome of their management, and second, increasing hostile or unstable environment for foreign mining and oil&gas companies led to less and less exploration of new resources while the aging fields deliver less and less oil and gas. This is another consequence of stupid policies dating decades ago. We can see that in the trade balance now.