import policy on fisheries sector in indonesia

8/12/2019 Import Policy on Fisheries Sector in Indonesia

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Import Policy on Fisheries Sector in Indonesia

(A Lesson from Import Prohibition in Niger ia)

By :

Kiestiko Sri Saptasari

DOUBLE DEGREE PROGRAM

OF PUBLIC ADMINISTRATION

BRAWIJAYA UNIVERSITY

FACULTY OF ADMINISTRATIVE SCIENCE

MALANG

2013


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Introduction

Indonesia maritime area is two third bigger than the land or around 3.544

million km2 and become the second longest coastal line in the world after Kanada

with 104.000 km.1From the very wide natural resources, it is not impossible for

Indonesia to change its orientation from land-focused development to maritime

oriented. Fisheries potency covering capture fisheries, marine aquaculture, and

common marine activities is around US$ 82 billion per year, excluding other

potency for further fish products processing.

Sources:http://pk2pm.wordpress.com/2011/02/07/pertumbuhan-ekspor-impor-ikan-dan-produk-

perikanan-indonesia/

Based on the data from Ministry of Marine Affairs and Fisheries export

value of Indonesia fisheries tends to always increase year by year. In 2009, it

reaches US$ 2.5 billion and US$ 2.8 billion in 2010. While, the number of fish

consumption also in the same trend of increasing which is mean that local

community already aware about the nutrition and protein of fish and fish products.

Unfortunately, serious challenges are go along with big potency of

fisheries sector that should be faced and regulated quickly by the government.

1Marine and Fisheries in figures, 2010


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Some of the challenges are illegal fishing, lower prices of fish captured by local/

traditional fishermen as the impact of allowing imported fish to Indonesia, and

lower quality of fish products that does not meet International standard. Illegal

fishing is the most crucial problem in which government try to deal with it

recently. Practice of illegal fishing done by other countries to catch a large

number of fish in Indonesia territory is may be happened because of minimum

security level to protect maritime area. Evidently, the weak of Indonesia security

may appear due to a very wide maritime line which could not be covered by

maritime security armada. Besides, traditional fishermen using traditional fishing

vessel unable to reach all marine area makes fisheries resources have not been

exploited maximally. These conditions make other countries want to take

advantage of our weakness by doing illegal fishing and over fishing in some

productive marine area of Indonesia.

Fisheries economy condition, nowadays, is still need to be reformed.

While government tries to make use of fish auction system in every fishing port in

Indonesia, practically, middlemens role in ports is still dominant. Thus, unstable

fish prices could not be avoided. The contrary may happen if government

regulates fix prices of valuable commodities like fish, rice, potatoes and other

primary goods. By having standard prices, fishermen or other local producers will

have constant income whether the amount of their fishing in a great abundance or

not. Factually happen recently is that when excessive fish stock available in

market, its prices will be very cheap and fishermen do not have additional income

since the cost of going fishing is just the same as the income they get in selling the

captured fish.

The worse condition occurs along with government positioned to import

fishes when not enough fish available in market in which happen because of over

fishing and lack of suitable armada to fishing in the middle sea outside

fishermens usual fishing area. The policy of import fish is giving more negative

side instead of positive one. Lower-price imported fish make traditional fishermen

unable to compete with, because local fish is, sometime, more expensive not

because the quality is better, but because the fishing cost is unaffordable. If it


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happens, fishermen will lose their primary income of fishing. Moreover, lately

found that most of the imported fish contain dangerous and unhealthy substance.

What should be done to overcome those challenges? Government should

increase the security level in maritime boundaries by providing enough armada.

Also, cooperation network between government and local fishermen have to be

linked for hand in hand keep watch and develop marine fisheries sector. National

regulation of standard price for fishes also need to be quickly implemented, as

mentioned above, to maintain fishermens income and welfare. Standard price

could also reduce or even omit the existence of middlemen in transactional

process of fish from port to consumers. Lastly, decrease imported fish from other

countries by giving higher requirements of fishes including its hygiene and quality

prior entering Indonesia market. While lessen the number of imported fish,

government could focus on how to maximize the small and medium- scale

enterprises / industries of fish and fish products in order to substitute imported

fish products with local products.

Lesson from Nigerian Experience on Import Prohibition

Focusing on the above mentioned challenge of Indonesia marine and

fisheries sector especially related to the issue of imported fish and fish products in

domestic market, the experience of Nigeria for making import prohibition as a

trade policy instrument could be a lesson for Indonesia government.

Summary

Nigeria is a rich country from natural oil resources. In the world, Nigeria

positioned as the 4thbiggest of Organization of the Petroleum Exporting Countries

(OPEC) members and the 9th richest country of oil in the world. Its production

reaches around 2,256 million barrel/day with domestic consumption 275 thousand

barrel/day (estimation in 2001).

Since 1970s, Nigerias main trade policy instrument shifted from tariffs

import to qualitative one, particularly import prohibition and import licensing.


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Therefore, its government drafted a long list of products banned to enter Nigeria

especially agricultural products (fruit, vegetables, beans, fishes, meat) and

manufacture products (rubber, wood, textile, and chemicals). Those items of

import prohibition products are changed year by year, although it still covered the

same categories of products.

The government of Nigeria states that the import prohibition policy was

designed to promote as well as protect local industries, employment and balance-

of-payments objectives in the context of an import substitution-industrialization

strategy. Key elements of this policy are to protect domestic industries and reduce

dependence of imported products, and ensure the availability of raw materials

cannot be obtained from domestic sources. Further, from agriculture sector the

import prohibition policy aimed to discouraging importation of all foods which

cannot be obtained from domestic sources. Moreover, in manufacturing sector, it

also used to increase the local content of Nigerian industrial output through the

application of local raw material.

Nevertheless, dealing with policy action there must be 2 sides of pros and

cons. Against the pros mentioned above, it is said that this import prohibitionpolicy tends to protect inefficient local/domestic industries and increase the

growth of black market since there are a lot of domestic businessmen/importers

wanted to get benefit for their own from illegal import products. A survey also

stated that balance-of-payment Nigeria was based on the oil resources and has no

correlation with changes on import prohibition policy. In addition, there is no

exact prove that local productions are benefitted with the policy because capacity

level of production is in line with the availability of domestic raw materials. Onthe other hand, local industries do not have competitiveness and lack of

infrastructures.

The manufacture producers stated that government should be more

focused on providing adequate infrastructures instead of decided to have import

policy. When government determined to have import prohibition policy it

objective was to provide and create market for local products. Unfortunately, local

industries met difficulties to fill market demand due to the lack of raw materials


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for productions. This condition lead to increase the prices of goods with low grade

of quality which means consumers becomes the main victims of the condition.

Because of the implementation of this import prohibition policy could notmeet the main objectives, on the contrary, brought Nigeria to burden foreign debt;

World Trade Organization (WTO) suggest Nigeria to change the import

prohibition into high import tariff particularly for products that could be produced

domestically.

Discussion

From the above mentioned journal, it is found that there are 3 objectives of

taking import prohibition policy into implementation: environmental orientation,

promote local industry as import substitute, and maintain the balance-of-

payments.

a. Import prohibition for environment orientationGovernment of a nation could prohibit import products from other countries

because the products could harm human, animals, or even plants in their

country. In addition, import prohibition policy is executed to certain products

because it is the result of natural resources exploitation that could damage the

balance of ecology.

b. Import prohibition to promote local industryThere are two conditions for a country to implement safeguards measures

(quantitative restriction on import and export):

Increasing import of products which is available in domestic markets Increasing import threat and create serious loss for local industries which

produce similar products with import ones.

However, the import prohibition because of those conditions is only for

temporary until domestic industries could adapt and able to handle the

pressures. It is in line with the requirements of World Trade Organization

that forbid its member to have import prohibition as mentioned in the

regulations chapter XI GATT 1994.


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c. Import prohibition of maintain the balance-of paymentsWhen a country having balance-of-payments difficulties, it could implement

prohibition on import when:

Low economic condition of the country that could only borne lowerstandard live of their nation

In developing process Having BOP difficulties because of the policy to open domestic market

and terms of trade changes

Nigeria is trying to implement the import prohibition policy for those three

reasons and it is found out that there are some advantages and disadvantages of it.

Advantages of the policy

a. Protect society from contaminated product that maybe harm the healthb. Make serious effort in preventing species from extinctionc. Prevention from environmental damaged. Protect existing domestic industriese. Reduce the countrys perceived dependence on importsf. Ensuring the availability of raw materials and capital goods which cannot be

obtained from domestic resources

g. Discourage important of all food in agriculture sectorh. Increase the local content of industrial output through enhanced use of local

raw materials in manufacturing sector

Disadvantages of the policy

a. Increase the possibility of black market in a countryb. Cause difficulties to monitor environmental damage because import activities

happen in black market

c. Lack of raw materials for industryd. High prices of products in market but in the low grade of qualityImport substitution in Nigeria tended to protect inefficient local industry from

international trade since it is not in the time with the development of infrastructure


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needed for the industry to produce better products. Therefore, the implementation

of import prohibition policy in Nigeria is likely fail because it is delivered to the

public without any suggestion form experts; hence, it did not touch the basic

problems of domestic markets that have to be solved.

Fisheries condition in Indonesia

Recent condition of fisheries sector in Indonesia shows that the large area

of maritime which should have big number of fishes, unfortunately could not

fulfill domestic demand of fish. Consequently, government takes policy to import

fish from neighbor countries. It is a contradictive decision from Indonesia

government because they, actually, should protect fishermen and provide

intensive extension activities to increase productivity products. Moreover,

government could also provide soft credit for fishermen for better technology in

fishing activities which directly raise fisheries production in Indonesia.

Lately, it is found that illegal fish import had entered Indonesia market and

create fidgetiness of fisheries community. The lower prices of import fish make

local fishing products do not able to compete in the market; as a result, domestic

fishermen loss their income and have to sell their captured fish in the cheapest

price instead of getting nothing. When their income is less that the cost of

production/fishing, fishermen prosperity will also be questioned.

Government have made import policy for fisheries products especially for

those that could not produced in country, however, what had happened in the

market is far away differ from the rules. Illegal import fish, which is not allowed

to enter the country, can be easily found in traditional as well as modern market.

Although government stated that it will be returned back to the sender, this import

fish may be used for domestic industries because of the lower prices. On the other

hand, illegal fish may danger the species of fish because of excessive amount of

fishing from other country which probably taken from Indonesia sea.

The above mentioned factual condition is important enough for

government reconsider to make the new import policy on fisheries sector which is

more benefitted local fishermen as to increase their prosperity, productivity,


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improve fish quality, as well as to protect local fish and fisheries industries.

Therefore, the advantages of import prohibition policy experienced by Nigeria

could be taken into account as the basis in reproducing new fisheries import

policy in Indonesia. In addition, the disadvantages of the policy in Nigeria could

also be as evaluation on how government should provide side solution to come

together with the import policy implementation.

Conclusion

The import prohibition policy in Nigeria is tried to increase its domestic

economy level by protecting its natural resources, promoting local industries, and

reduce countrys dependency on import products from other countries. However,

it is not effectively implemented since the policy tended to protect local industries

with ineffective production. The ineffective production activities happened

because in implementing the import prohibition policy, the government did not

provide sufficient infrastructure to support domestic production. Hence, the local

products reach high prices with low quality goods.

On the other hand, similar impact in Indonesia fisheries sector happened

due to different reasons. Domestic fisheries with higher prices could not compete

with import fisheries from other countries as a result of import permission in

Indonesia market. Experts said that the import permission policy in Indonesia do

not give any advantages for traditional and national fisheries community; further,

it torment them with the attack of import products. Having large number of

natural resources including fishes, should be an urgent consideration for Indonesia

to apply import prohibition in fisheries sector.


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Suggestions

Based on Nigeria experience and fisheries sector condition in Indonesia, there are

some suggestion for government:

a. Because of having great quantities of marine resources, Indonesia governmenthas to reconsider the import policy implemented recently and change it into

import prohibition policy for fisheries sector.

b. Government have to provide intensive training and extension for better fishingpractices in order to improve fisheries quality

c. Provide soft loan to support fisheries activities in order to increaseproductivity of fish and fisheries products

d. Give adequate infrastructure for fisheries industries so that import prohibitionpolicy will be a trigger for fisheries community in providing raw materials

which are not available in domestic market through aquaculture or other

activities.

import policy on fisheries sector in indonesia

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