Oh yes, it is clear (at risk of a deficit)Jakarta (ANTARA) - The United States’ (US’) decision to remove Indonesia from the list of developing countries will make its trade balance with the US record a deficit, Secretary of Coordinating Minister (Sesmenko) for Economic Affairs Susiwijono stated.
"Oh yes, it is clear (at risk of a deficit)," Susiwijono stated in Jakarta on Monday.
Susiwijono explained that it was linked to the import duty facility or the Generalized System of Preferences (GSP) scheme provided by the US to developing countries, including Indonesia, which would be lost.
"The US’ decision to remove Indonesia is linked to trade facilities since the consequences will be on the GSP and so on," Susiwijono pointed out.
Once Indonesia does not receive the GSP facility, it will have to pay import duties at the normal rate or Most Favored Nation (MFN).
"Our GSP is very large. Friends of the Ministry of Trade will explain," Susiwijono remarked.
He stated that currently, Indonesia's trade with the US was still in surplus as was apparent from the Central Statistics Agency (BPS) data indicating that Indonesia's trade surplus with the US in January 2020 had reached US$1.01 billion.
"Our trade with them (the US) is also still in surplus," he stated.
In the meantime, on Sunday (Feb 23), economic observer from the University of Indonesia Fithra Faisal Hastiadi explained that the other impact of the US decision was that Indonesia would be subject to higher tariffs since it would no longer receive facilities as a developing country.
Furthermore, the Official Development Assistance (ODA) facility, which is an alternative financing from external parties to conduct social and economic development, had been revoked.
"We are speaking of debt relations, so we can no longer do classification of ODA. This is since with that, we will be able to get cheap interest. If under US$4,000, we can get 0.25 percent," Fithra explained.
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Translator: Astrid Faidlatul, Azis Kurmala
Editor: Sri Haryati
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