Trade issue always becomes one of the most controversial issues in today?s world. Over the last two decades, along with the lowering of trade barriers and opening up of free trade, we have witnessed lowered production cost, reduced prices of goods and ser
(left-right) Dr. Rizal Ramli, John Riady and Dr. Razeen Sally
Trade issue always becomes one of the most controversial issues in today?s world. Over the last two decades, along with the lowering of trade barriers and opening up of free trade, we have witnessed lowered production cost, reduced prices of goods and services, increased job creation, and stronger economic growth. However, was it really trade that brought all the benefits? Unprecedented levels of social, economic, geopolitical, and technological volatility are testing our conviction in trade. Responding to this condition, UPH held the UPH Great Debate with ?To Trade or Not to Trade? to facilitate a discussion about free trade issue.
This discussion led by two distinguished speakers. Dr. Rizal Ramli – former Coordinating Minister of Economics in President Abdurahman Wahid?s era and Dr. Razeen Sally -?Director of the European Centre for International Political Economy (ECIPE), an?independent and non-profit policy research think tank dedicated to trade policy and other international economic policy issues?based in Brussels. He is also an?Associate Professor, Lee Kuan Yew School of Public Policy, NUS. The discussion moderated by John Riady, who is UPH?s Executive Dean of Business School, Law School and School of Government and Global Affairs.
Starting his analysis, Dr. Rizal Ramli explained that, first, the issue that should be discussed is not about ?to trade or not to trade?, but to be more accurate, it is about free trade and fair trade. Because if we do unfair trading, there will be no benefit at all. According to him, the policy of lowering the tariff that had been implemented in Indonesia in the 70?s was a good policy. Bu then the policy of lowering the tariff became quite irrelevant because Indonesia?s industry is not too competitive. The manufacture?s growth in Indonesia is also tending to decline compared to the era of 70?s and 80?s. Dr. Rizal thought that this is related to the government?s trade policy that is more to ideology rather than empirical. Second, compared to other countries that are in crisis, the economic growth of Indonesia can be considered as good. However, if that growth is seen from the perspective of Human Development Index, Indonesia is in the lowest position compared to Singapore, Malaysia, and Thailand. One of the causes, he stated, is from the quota system policy that is being applied in the Indonesia?s food import?s system.
In the debate session, responding Rizal Ramli?s explanation, Dr. Razeen Sally said, regarding the trading and domestic competitiveness issue in Indonesia, to overcome the poverty in Indonesia, the main key is to repair the manufacturing sector and open the country for the investors. He took India as the example, a country that did the economy reformation but ended up wasting too much cost. Consequently, India?s market fell and India had to open up its market for investments. However, India?s action was too late and from this example, Dr. Razeen suggested that Indonesia to open its market immediately before it is too late just like what happened in India.
At the end of the session, each of the speakers gave out their conclusion. Rizal Ramli said that Indonesia could open its market but it needs to be followed with an aggressive competitive policy because the current policy does not give a real competition.
Meanwhile, Dr. Razeen Sally said that to open Indonesia?s market, Indonesia required three things to be done. First is to open market with a prepared trading agenda. Second is to reduce subsidy especially on gasoline subsidy. Third is to reform the labor market
The participants came from various backgrounds, such as government officials, embassies, professionals, academia, and media. The discussion started with general statements from both speakers, continued with their arguments one after another. The purpose of this discussion is to provide a platform for knowledge transfer and meaningful discussion.
