Indonesia needs to make money from its exports

2022-04-28 0 By

The Indonesian Policy Center (CIPS) research institute says Indonesia needs to increase the value of export tariffs and focus on raising revenue from rising commodity prices that underpin exports to help reduce the impact of inflation.Krisna Gupta, a researcher at the institute, said, “The government itself must strive to gain more benefits from the rising prices of commodities exported,” antar, a local media outlet, reported Thursday.Recently, the ability of the state to tax goods is not as high as the previous oil fence.Mr Gupta points out that the effectiveness of using domestic market obligation (DMO) rules or export bans is questionable, as such policies risk distorting trade and provoking retaliation from trading partners.Raising export tariffs, while not ideal, could be a less distorting solution than a DMO or an export ban, Gupta said.At the same time, the proceeds of export tariffs could be used directly to subsidize the public.In addition, he said, Indonesia needs to be more actively involved in global cooperation because it is needed now more than ever.With Russia and Ukraine cut off from global markets, there are fewer countries that can coordinate, which will reduce trade and the exchange of goods.Gupta revealed that Indonesia is now in a unique position as a member of the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade agreement, and holds the rotating presidency of the G20.The research institute believes Indonesia should use this opportunity to cooperate in various fields.Global cooperation is also urgently needed to assess distortions in trade balances among countries, increase production and distribution of anti-epidemic vaccines and war equipment, and accelerate efforts to tackle the global climate crisis, he said.On the other hand, he says Indonesia is actually benefiting from higher energy and mineral commodity prices, as coal, vegetable oil and nickel are Indonesia’s traditional exports.Gupta said rising commodity prices in the international market will increase the incentive for companies in the commodity-exporting sector to sell abroad.But at the same time, Indonesia must be prepared to cope with growing problems with cooking oil and other basic needs.