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Petty protectionism

Jakarta Post Editorial - April 2, 2024

Jakarta – There is confusion all around about new restrictions on personal imports of items purchased abroad. The new rules are just a minor part of a much wider Trade Ministry regulation, yet they have received most public attention because the issue is an important one for small business owners and travelers alike.

Bits and bobs of official information, and lots of guesswork, have been spreading like wildfire through social networks and mainstream media, largely because the new rules have not been adequately communicated by the authorities in a way people can easily understand.

One could get the impression that passengers are deliberately kept in the dark about what they can and cannot bring into the country in their luggage, and what duties they need to pay on such goods.

The only way for the government to dispel such an impression is to provide detailed instructions that are both clear and comprehensive and that leave zero room for interpretation by border officials on the ground, so that the average traveler need not tremble like a first-time smuggler when approaching the customs checkpoint.

To increase public acceptance and compliance with the rules, it would be wise to also explain the reasons for the curbs, such as an effort to protect domestic manufacturers in nascent industries.

In typical Indonesian fashion, and bowing to the public uproar over the restrictions, Trade Minister Zulkifli promised to tweak the regulation on imports just days after it went into force last month.

That is a good opportunity for simplification, because to create rules that are easily understood, lawmakers and government officials must avoid excessive complexity, even at the risk of leaving a loophole here or there that may be exploited by a crafty traveler or reseller.

Given Indonesia's large domestic market, having a few goods sneaked into the country that may exceed the personal allowance or be sold on to someone else later is hardly going to cause an economic crisis, so in the grand scheme of things, inspecting every pair of shoes or every laptop for clues about their value or purpose looks petty.

Regulations are one thing, but their implementation on the ground can be quite another. Customs officials in Medan, North Sumatra, reportedly told passengers to report their personal belongings prior to their departure from Indonesia, but the Finance Ministry later stated that this was optional.

Zulkifli reportedly said import duties did not apply to items intended as gifts or souvenirs, even if they exceeded the prescribed limits, but how such intended use is to be proven is anyone's guess.

Asked how customs officials would distinguish between items intended for personal use and those for resale, Zulkifli replied: "That's customs' business. They know. It's already common practice."

Such practice, however, creates plenty of gray areas that could be exploited either by resellers or corrupt customs officials.

Without the utmost clarity on these matters, customs authorities should not be surprised about allegations of arbitrary enforcement of rules or even graft, because passengers can and will take to social media to vent their frustration about travel experiences.

There are good reasons for limiting what passengers may bring in from abroad and for imposing import duties on certain goods or excessive amounts, but the government should be under no illusions that it can prevent each and every restricted item from finding its way into the country.

Domestic manufacturers, instead of relying on import curbs and taxes to protect their markets, simply need to get their act together to make more desirable handbags and shoes at home that can hold their own against foreign competition.

The government, instead of resorting to petty protectionism, may want to focus more on helping domestic firms produce goods efficiently at home. One way to help them is by making it easy for them to import materials and intermediary goods from abroad, but the very same Trade Ministry regulation, some businesses have complained, prevents this.

Source: https://www.thejakartapost.com/opinion/2024/04/02/petty-protectionism.htm