TEMPO.CO, Jakarta - Trade Minister Muhammad Lutfi revealed the reason behind Jokowi's call to hate foreign products. He said that there are foreign e-traders selling imported goods in unfair ways, a practice that is killing local SMEs.
"There is a background for the president's statement, which is my report of practices that violate trade regulations," Lutfi said in a video conference, Thursday, March 4, 2021.
The minister reported that the practice was allegedly carried out by global e-commerce companies. For example predatory pricing practices to "kill competitors".
"It prevents an important trade principle, namely fair and beneficial trade for the buyers and sellers," said Lutfi, who said he gave the report to Jokowi some two days before the Trade Ministry's Work Meeting.
He said that the president hates the illegal practice, because it has destroyed many MSMEs. His report was corroborated by a paper released by an international organization regarding the destruction of Islamic fashion MSME activities in Indonesia.
The report, Lutfi said, revealed that Indonesia's home industry were growing in hijab sales between 2016 and 2018. The segment employed 3,400 workers with a production cost of more than US$650,000.
This progress was recorded by the Artificial Intelligence of foreign digital companies. "The information was used to create an industry in China, and the goods are exported to Indonesia. They only paid US$44,000 in import duties, but it destroyed the MSME industry."
The Chinese products are sold at a very low price of just Rp1,900 per peace, making it difficult for SMEs to compete and eventually their businesse collapsed.
"This is why the president called for hate against foreign products. Because of the unfair, unprofitable, and not beneficial trade practices," he said.
However, Lutfi emphasized that the president does not support protectionism as it would not bring added value for the welfare of Indonesians.
Jokowi wants Indonesians to love local products more than imported products. With more than 270 million population, Indonesians should be loyal to local goods.