Thomas Stefanus Kaihatu


AFTA is the concept of eliminating tariff barriers among ASEAN countries with a view to integrating the ASEAN economies into a single production base and regional market. The main objective of AFTA is to increase ASEAN's competitive edge as a production base geared for the world market. The critical step in this direction is the liberalization of trade in the region through the elimination of intra-regional tariffs and elimination of non-tariff barriers.
In Indonesian industrialists view, the implementation of liberalization of trade in AFTA scheme is not only a challenge, but more likely a massive problem, for they have minimum competitive advantage compared to other ASEAN countries (especially Singapore, Malaysia and Thailand).
Since the 1970s, Indonesian economic development was built on the basic pattern of the bureaucratic-industrialist relationship, which caused fragile industrialists and corrupt bureaucrats. These bureaucrat-industrialist relationships grew immensely in Soeharto's era, and are still sustained until now.
Recently, Indonesia had to face the competitive trade among ASEAN countries as the consequences of the implementation of the regional integration commitment through AFTA. Moreover, as a member of ASEAN, it looks like Indonesia has no choice but to join this competition.
Until now, there is so much resistance in implementing AFTA in Indonesia, especially accepting the Common Effective Preferential Tariff (CEPT)scheme in the import sector (for both industrialist and customs). The implementation of CEPT scheme, in the import sector, makes Indonesian industrialists worry of losing their dominance on local markets. On the other side, the bureaucrats, especially the Indonesian customs, will lose their revenue from import duty and also their 'under-table business', that causes a high cost economy and creates so many inefficiencies.


AFTA, Common Effective Preferential Tariff (CEPT), Industrialist, Customs.

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The Journal is published by Faculty of Economics, Department of Management - Petra Christian University. It available online supported by Directorate General of Higher Education - Ministry of Research, Technology and Higher Education of the Republic of Indonesia.

©All right reserved 2016.Jurnal Manajemen dan Kewirausahaan, ISSN: 1411-1438, e-ISSN: 2338-8234

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