ISD talked to the CEO of Australian Services Roundtable in Brisbane

Brisbane, November 14, 2013 – A more informed policy making process is crucial in helping the services sector to grow. It can be achieved through constant dialogue between the government and industry associations. That is one of the points emphasized by the CEO of Australian Services Roundtable (ASR) Ian Birks in his presentation in the short course titled “Best Practices and Strategies for Promoting Indonesia’s Services Exports”. Indonesian government officials from several ministries and representatives of the Indonesia Services Dialogue (ISD) participated in the short course organized in Brisbane by UniQuest of the University of Queensland in November 1-15, 2013.

(Right-left) Executive Director of ISD Barliana Amin, CEO of Australian Services Roundtable Ian Birks, Public Outreach Officer of ISD Daniel Purba and Senior Lecturer of UQ Business School Dr. Paul Brewer.

(Right-left) Executive Director of ISD Barliana Amin, CEO of Australian Services Roundtable Ian Birks, Public Outreach Officer of ISD Daniel Purba and Senior Lecturer of UQ Business School Dr. Paul Brewer.

Commonly seen as strong in agriculture and mining sector, Australia is actually a services-led economy. Ian further explained that services industries make up the bulk of the Australian economy, accounting for almost 70 per cent of GDP while agriculture and mining are respectively accounting for only 2,6 and 7,7 per cent of GDP. “However, the share of services in Australian total exports in 2011 is AUD 50,1 billion or sixteen per cent. It shows that Australian services industries still focus mostly on domestic market,” siad Ian.

In terms of employment, over 85 per cent of employment in Australia is in the services sector. Health care and social assistance has become a leading employer. This is due largely to the aging of the population. Retail and construction are also significant employers. Although retail trade is a high employer, structurally low wages in the sector mean that the overall wages bill is relatively modest. The largest total wages in the economy are paid by professional, scientific and technical services, and construction, both of which are high employers and have relatively high average wages. Finance and insurance and administrative and support services are significant contributors to total wages, and wages are rising in both sectors.

The growth of services sector in Australia is partly due to the active advocacy of ASR as the only dedicated “whole-of-services” industry organization. As the voice of Australian services industries, ASR actively leads the debate on domestic services policy reform to ensure Australia has a competitive local industry with strong productivity. “ASR is currently also advocating the need for services innovation as the key to stay at the top of the high-value services chain,” Ian Birks added.

In response to Ian, the Executive Director of Indonesia Services Dialogue Barliana Amin shared that Indonesia also needs domestic services policy reform to grow its services sector more rapidly. Policy restrictions, especially on foreign direct investment, are thought to have hampered the growth of the sector. “That’s why we are trying to establish the Indonesia Services Dialogue to promote policy dialogue between the government, private sectors and academics as well as to find solutions to grow a more efficient services sector. What ASR does is an example of how an industry association can effectively voice the interest of services sector and we hope to learn a lot from ASR,” said Amin. (DP/ISD)

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ISD-Kadin “ASEAN Business Briefing on Services”

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Jakarta, September 26, 2013 – Indonesia Services Dialogue co-hosted the “ASEAN Business Briefing on Services” with Kadin Indonesia in Jakarta. This event was part of the ASEAN Series held by Kadin Indonesia to discuss the upcoming implementation of the ASEAN Economic Community (AEC) in 2015. ISD was particularly choosen to co-host the event because ISD was seen as an increasingly known forum for stakeholders in services to discuss obstacles, research, and regulations in services.

Chris Kanter, Vice Chairman of Kadin Indonesia, said in his opening speech that the awareness of Indonesian business players about the ASEAN Economic Community is relatively low. Although the implementation is scheduled in 2015, the ASEAN Economic Community was still seen as something far and vague. This is worrying as ASEAN Economic Community is inevitable and Indonesian business players will sooner or later feel the impact of the regional economic integration.

“What opportunities will AEC bring? What are the threats? What will change and what should Indonesian business players prepare to survive? Those are the questions that we need to answer,” Chris Kanter said.

Services is increasingly important for ASEAN economy. On average services industry contribute 40-50 percent of GDP in ASEAN countries. In Indonesia services is still like a forgotten sector despite its significant contribution to the economy. In 2012 services contributed 43 percent of our GDP. Since 2001 this sector grows 7,2% on average per year, faster than the primary and secondary sector. In 2012, 55,4 million people (49,2% or total workers) worked in services industry. The number of jobs created is almost 400.000. Another important fact is that 35% of input used in productive sector is services.

Based on those facts, Chris Kanter concluded that there need to be serious efforts to provide access to better quality services in order to increase our productivity and competitiveness especially in manufacturing. Regulatory reforms and trade liberalization are among the way to promote such access.

In the context of ASEAN Economic Community, liberalization in trade in services is done under the ASEAN Framework Agreement on Services (AFAS). Under AFAS so far ASEAN countries have agreed on 8 of 10 packages of commitment. In 2015, 128 services sector will be opened for ASEAN foreign equity participation up to 70%. In addition to that barriers to cross-border supply and consumption abroad will be eliminated.

Meanwhile, Sjamsu Rahardja from the World Bank highlighted the growing importance of services. He said the degree of which manufacturing sector is serviced seems matter for value addition. He also added that services sector depended very much on the input from other services sector, quoting a finding that 50-70 percent of intermediate inputs in services sector were also services.

Services is also very important in terms of multiplier effect. Sjamsu said the employment elasticity of services jobs to services GDP is 0,32. That means 1% of increase in services GDP (in construction, transport-communication, and trade sectors) will add 100,000-130,000 jobs in those sectors.

Despite the importance of services to our economy, unfortunately the services component in Indonesia’s merchandise export are lower compared to other ASEAN countries. The same condition is also happening in manufactured goods export (lower than Malaysia).

ISD1   ISD2

“We should see this as a fact that there is still room for us to increase the services element of our export. The room is big enough for everyone to ‘dance’ without ‘bumping’ into each other,” said Sjamsu.

Despite the big room to boost growth in services, according to Sjamsu ASEAN is facing a serious challenge. The Services Trade Restrictiveness Index data shows that in general ASEAN countries still impose high restriction in trade in services. According to that data, Indonesia is the second most restrictive below the Philippines.

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In conclusion, Sjamsu restated the potential benefit of ASEAN economic integration especially for Indonesia’s services industry. But it will depend on coherent and sound regulatory regime. The Government needs to implement good industry-specific regulations (financial prudential, service standards, quality assurance) in parallel with opening up while addressing capacity constraints of local services providers, such as skill and qualifications.

Dionisius Narjoko from Economic Research Institute for ASEAN and East Asia (ERIA) elaborated further the technical aspects of AFAS and shared the progress of the negotiation. The focus of AFAS, he said, is actually on commercial presence or Mode 3 as Mode 1 and 2 is more or less already open. But he reminded that negotiation for Mode 3 is more difficult because ASEAN is expected to commit more than 49% of foreign equity participation. Another challenge in negotiating AFAS, said Dion, is the variation of Liberalization Rate among ASEAN countries.

“New members like Vietnam, Lao PDR, and Cambodia tend to be more committed to open their services sector while other ASEAN countries is less open. For example, Thailand is low on Liberalization Rate because the country has a regulation that applies to all sectors that limits foreign equity participation to only 49 percent. Another case is the Philippines which has many ‘footnotes’ attached to its commitments,” said Dion. (DP)

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ASEAN Business Roundtable: The Impact of AEC on Services Industry in Indonesia

ASEAN Business Roundtable

“The Impact of ASEAN Economic Community on Services Industry in Indonesia”

26 September 2013

10.00-12.00

Ruang AEBC, Menara Kadin Indonesia Lt. 29

Jl. H.R. Rasuna Said X-5 Kav. 2-3, Kuningan – Jakarta

 

Indonesia Services Dialogue is proud to collaborate with KADIN Indonesia in hosting the ASEAN Business Roundtable. This event will focus on how the implementation of ASEAN Economic Community 2015 will impact the services industry in Indonesia and what business players should prepare in order to benefit from this regional economic integration.

Dionisius Narjoko from Economic Research Institute for ASEAN and East Asia (ERIA) and Sjamsu Rahardja from World Bank will share their thoughts on this topic and we would like to invite you to join our discussion.

This event is free of charge.

Info & RSVP: daniel.purba@apindo.or.id 

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Indonesia Services Dialogue Held the 2nd Policy Research Workshop

Sondang Anggraini, ISD Government Coordinator from the Ministry of Trade, explained policies in services.

Sondang Anggraini, ISD Government Coordinator from the Ministry of Trade, explained policies in services.

Jakarta, August 1, 2013 – Indonesia Services Dialogue (ISD) held the second Policy and Research Workshop last Thursday (25/7) in Jakarta. The workshop was attended by stakeholders from the Government, the research community and the private sector. The main agenda of the workshop is to discuss four policy research papers presented by researchers from Centre for Strategic and International Studies (CSIS).

Pricing practice in electricity services is among the issues discussed. Dr. Yose Rizal Damuri from CSIS explained that the current tariff structure in electricity services is not economically sustainable because it neglects cost-recovery and economic principles. Rizal further recommended that the Government needs to reintroduce automatic tariff adjustment by having two components of tariff: base tariff for certain period (say 2 years) and adjustment tariff to take account exchange rate fluctuation or fuel price shock (reviewed quarterly). In addition to that, tariff structure should also incorporate various features such as peak and off-peak time and geographical differences.

Another research by Dr. Haryo Aswicahyono from CSIS tried to explore trade and employment in services. In his research Haryo found that relatively deregulated industries such as air transport, non-banking finance and business services grew especially quickly while highly regulated ones such as sea transport had and banking grew much less quickly. He also recommended that lifting restrictions on foreign investment and skilled labor (eg. FDI in tertiary education) are necessary to promote growth in services. Greater domestic competition is also critical for lower cost delivery of services (eg. Airlines).

A research on the impediments to growth in movie industry raised a dynamic debate in the workshop. The researcher, Dr. Titik Anas from CSIS, highlighted the limited availability of movie theaters in Indonesia. She said that there is only 0,3394 screen per 100.000 inhabitants in Indonesia, slightly higher than Laos and Cambodia. Movie theaters are mainly in Jakarta, West Java and East Java. Titik also criticised that film making, film distribution (export, import and distribution) and viewing (movie theater) are closed for foreign investment for protection. Unfortunately there is only one big local player dominating these three areas of business. With practically no competition it is hard for improvements to happen.

The fourth research tried to measure efficiencies in seaports using Data Envelopment Analysis. Ten ports that were observed in this research are: Jakarta International Container Terminal (JICT), International Container Terminal of Tanjung Perak, Terminal Peti Kemas Semarang, Belawan International Container Terminal, Teluk Bayur Container Terminal, Makassar Container Terminal Batu Ampar, Singapore, Tanjung Pelepas (Johor, Malaysia), Laem Chabang (Thailand).

There were also updates on services activities in APEC and ASEAN presented by Sondang Anggraini from the Ministry of Trade as the Government Coordinator of ISD. Meanwhile David Parsons gave updates on ABAC agenda on services. The Executive Director of ISD, Barliana Amin, also had a chance to give his appreciation to USAID SEADI for their financial support to ISD. Amin said ISD will continue its activities for another year under different funding. Amin also thanked all stakeholders for their support to make ISD a clearing house for policy and research to promote greater growth and efficiency in services. (DP)

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ISD Forum Gets Attention from ABAC

Jakarta, August 1, 2013 – ABAC is pushing services issues and refers in its latest newsletter to the Public Forum on “Competitive Services: Unlocking Value Adding Potential for 21st Century Business”. The event was jointly organized by Indonesia Services Dialogue (ISD) and ABAC Indonesia on April 19, 2013, in Surabaya.

The forum provides an opportunity for senior Indonesian Ministers, the APEC and ABAC processes and international experts to engage with the Indonesian Business Community and its business and investment partners on some of the key priorities emerging in the APEC 2013 agenda. 

The Public Forum was specifically focused on the role of the services sectors because of their critical importance in achieving successful outcomes for infrastructure development, in developing an understanding of the new regional and global dynamics in trade and investment and in bringing about more efficient connectivity.

The Public Forum provided greater understanding and a balanced discussion on the international and domestic dimensions of services as APEC Ministers Responsible for Trade meet in Surabaya to discuss these and other issues and in the lead up to the APEC Leaders and Ministerial Meetings in Bali in October and the WTO Ministerial Meeting in Bali in December.

ABAC Newsletter – Q3 2013

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2nd Policy Research Workshop, 25 July 2013 in Jakarta

Registration by e-mail to: daniel.purba@apindo.or.id

 

Coordinated by Ministry of Trade, APINDO and CSIS

2ndPolicy Research Workshop
Agenda

9.30 am – 1.30 pm, Thursday, 25 July 2013
APINDO, 10th Floor, Gedung Permata Kuningan*

Supported by USAID SEADI program

 

09.00-09.30: Registration

09.30-09.45: Welcome and Opening Remarks

Welcome on behalf of Indonesia Services Dialogue Secretariat

  • Barliana Amin, Executive Director, ISD

Opening Remarks by ISD Government and Research Coordinators

  • Ibu Sondang Anggraini, Director for Trade in Services Negotiation, Ministry of Trad
  • Dr. Yose Rizal Damuri, Head of Economics Department, CSIS

09.45-11.30: Presentation and Discussion of Draft Policy Papers

1. Pricing Practice of Electricity Services (Presenter: Dr. Yose Rizal Damuri)

2. Employment Effect of Services Sector (Presenter: Dr. Haryo Aswicahyono)

3. Bottlenecks in the Development of The Film Industry (Presenter: Dr. Titik Anas and Dr. Haryo Aswicahyono)

4. Measuring Efficiencies in Seaports: the Data Envelope Analysis (Presenter: Dr. Titik Anas, Dr. Haryo Aswicahyono and Syahreza)

11.30-11.45: Review of Other Policy Papers and Research

  • Services and Food Security:  tabled presentation by Dr. Sherry Stephenson, ICSTD
  • Update on other research by workshop participants

11.45-12.15: Update on ISD and Services Activities and Ongoing Research

  • APEC and ASEAN: Ibu Sondang Anggraini, Ministry of Trade
  • APEC and ABAC: David Parsons, ABAC Indonesia

12.15-12.30: Review and Appreciation for Program Support – USAID SEADI

  • USAID Representative on behalf of SEADI
  • ISD Representative:  Barliana Amin, Executive Director, ISD

12.3012.45: Briefing on Future ISD Activities

  • ISD Secretariat

12.45-13.00: Other Business

 

 

*APINDO Office: Gedung Permata Kuningan Lt. 10, Jalan Kuningan Mulia Kav 9-C, Guntur – Setiabudi, Jakarta Selatan, 12910, Indonesia

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Indonesia Services Dialogue 2nd Public Forum, Surabaya, 19 April 2013

Public Forum on Competitive Services: Unlocking Value Adding Potential for 21st Century Business

Held in conjunction with the APEC Meeting of Ministers Responsible for Trade

Venue: JW Marriot Hotel, Surabaya

Friday, 19 April 2013, Surabaya

Hosted by ISD Coordinators (APINDO, Ministry of Trade, CSIS) in partnership with ABAC Indonesia and Kadin Indonesia

For more info & registration, send e-mail to: daniel.purba@apindo.or.id

Overview of Public Forum
The Public Forum on Competitive Services: Unlocking Value Adding Potential for 21st Century Business aims to provide an opportunity for senior Indonesian Ministers, the APEC and ABAC processes and international experts to engage with the Indonesian Business Community and its business and investment partners on some of the key priorities emerging in the APEC 2013 agenda.

The Public Forum is specifically focused on the role of the Services Sectors because of their critical importance in achieving successful outcomes for Infrastructure Development, in developing an understanding of the new regional and global dynamics in Trade and Investment and in bringing about more efficient Connectivity.
The Public Forum aims to provide greater understanding and a balanced discussion on the international and domestic dimensions of services as APEC Ministers Responsible for Trade meet in Surabaya to discuss these and other issues and in the lead up to the APEC Leaders and Ministerial Meetings in Bali in October and the WTO Ministerial Meeting in Bali in December.

The Public Forum will be hosted by the Indonesia Services Dialogue (ISD) in partnership with ABAC Indonesia and Kadin Indonesia. The ISD is a tripartite body representing Government, Business and Research, coordinated by the Ministry of Trade, APINDO and CSIS, which aims to promote development of the services sectors in Indonesia.

The proceedings will be simultaneously translated in Bahasa Indonesia and English to ensure full participation of both domestic and foreign participants.

The Public Forum is scheduled for Friday, 19 April which is the day before the Meeting of APEC Ministers Responsible for Trade.

Public Forum Agenda

13.00 – 13.30 Registration

13.30 – 13.40 Opening Session
Welcome on behalf of Indonesia Services Dialogue
Mr Sofjan Wanandi, Chairman, Indonesia Employers Association (APINDO)
Opening Remarks
Mr Suryo Sulisto, Chairman of the Indonesian Chamber of Commerce and Industry (Kadin Indonesia)

13.40 – 14.15 The Emerging Role of Services in Trade and Investment
Moderator: Mr Chris Kanter, Business Coordinator, Indonesia Services Dialogue; Vice Chair for Trade and International Relations,
Kadin Indonesia, Vice-Chair, APINDO
Keynote Speakers:
Mr Gita Wirjawan, Minister of Trade, Republic of Indonesia
Services and Value-adding: More Opportunities for Indonesia
Mr Alejandro Jara, Deputy Director General, World Trade Organisation
“Made in the World”: Why Services are Key to Participation
Q and A Session

14.15 – 14.30 Special Briefing on APEC 2013 Agenda
Ambassador Yuri Thamrin, Chair, APEC Senior Officials, Ministry of Foreign Affairs, Indonesia
Mr Iman Pambagyo, Director General, International Trade Cooperation, Ministry of Trade, Indonesia

14.30 – 16.00 Developing the Services Sector for Infrastructure and Connectivity:
Interactive Panel Discussion

Moderator: Dr Djisman Simandjuntuk, Chair of Indonesia PECC and Research Co-Coordinator (CSIS), Indonesia Services Dialogue
Dr Fukunari Kimura, Economic Research Institute for ASEAN & East Asia
Making Infrastructure Work with Efficient Services
Dr Sherry Stephenson, SEADI and International Centre for Trade and Sustainable Development (ICTSD)
Getting Real Value from Trade: The New Evidence about Services and Connectivity
Ms Jane Drake-Brockman, International Trade Centre, Geneva
Building Capacity and Cooperation for Effective Participation in the International Services Economy
Discussion Session

16.00 – 16.20 Coffee Break

16.20 – 17.25 Business Priorities in Building Competitiveness for Regional Economic Integration
Moderator: Mr Anthony Nightingale, ABAC Member, Hong Kong China, Director, Jardine Matheson Holding Ltd, Commissioner Astra
International
Keynote Speaker:
Mr Wishnu Wardhana, Chair of the APEC Business Advisory Council (ABAC)
The Emerging ABAC Agenda on Infrastructure and Services
Keynote Speaker:
Dr Chatib Basri, Chairman, Indonesia Investment Coordinating Board
Why Competitive Business Needs Competitive Services
Q and A Session

17.25 – 17.30 Concluding Remarks and Next Steps in Indonesia Services Dialogue
Mr Sofjan Wanandi, Chairman, Indonesian Employers Association (APINDO)

If you would like more information about the Public Forum please complete the Form below

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