RESTRICTED
GENERAL AGREEMENT O N
TARIFFS A N D
™!i^??w
TRADE
LiMted Distribution
Committee on Balance-of-Payments Restrictions
1970 CONSULTATION UNDER ARTICLE XVIII:12(b) WITH INDONESIA
Background Paper for the Expanded Consultation
Corrigendum
••
Page 2, paragraph 2
Replace the last two sentences by the following text: "In fact, the Plan is a
series of targets and estimates of some of the more predictable of the aggregative
magnitudes, and a statement of general policy objectives which is to be implemented
through more detailed annua], programmes within the Five-Year P3.an framework."
Page 3* paragraph 6
The first two sentences should read as follows: "The Plan document provides in
broad terms answers to such specific questions as those concerning the role and
direction of taxation, tariff and foreign exchange policies. The attainment of many
of the production targets set by the Plan will in fact depend on the policy alternatives chosen, and hence it is impossible at this time to discuss the feasibility of
the Plan in any detail.11
Page 12., paragraph 22
Replace the whole paragraph by the following text:
22. The actual need fcr imports (of consumer goods as well as raw materials) in the
Plan is projected on the basis of the following considerations:
(a) The Plan concentrates on an increase in agricultural output next to an increase
in industrial output. Although Indonesia is not yet industrialized, the majority of
indr-stries are at present operating below capacity. The intention is now to utilize
the existing excess capacity first which consequently requires larger imports of raw
materials. It is expected that the growth of the existing "other non-food"
commodities is higher than the expected average growth rate.
(b) Along with the growth in domestic production there will be an increase in real
income. Although part of this additional real income will be diverted to consumer
goods imports, it is expected that the major part will be spent on domestically
produced consumer goods and that, moreover, some traditionally imported consumer
goods will be substituted by domestic products. The net effect will therefore be a
decline in the import of consumer goods during the course of development.
BOP/lOo/Corr.l
Page 2
(c) The growth in gross domestic product is projected at 5 per cent per annum
or with a population growth rate of 2.5 per cent an increase of 2.5 per cent in
income per capita. The said growth will permit an increase in consumption as
referred to above. It should also be mentioned that the proportion of Government
revenue to gross national product has been increasing (inter alia on account of
tax intensification measures since a larger part of the increase in gross
domestic product has been absorbed through taxation in order to generate public
savings sufficient for financing the increased public investment).
Paces 20-21
Replace table 9 with the following:
w
w?
Table 9
INDONESIA - CHANGES IN EXCHANGE RATES, MAY 1967 TO DECEL-S51I !1Q6Q
(rupiahs per US$)
0
End of
BE rate
fey 1967
June 1967
July 1967
August 1967
September 1967
October 1967
November 1967
December 1967
135 to 144
135.5 to 138
135.5 to 138
135.5 to 151
139 to 150
146 to 152
150 to 235
160 to 235
127.5 to
147 to
149 to
153 to
160 to
156 to
166.5 to
215 to
January I960
February 1968
March 1968
April 1968
May 1968
June 1968
July 1968
August 1968
September 1968
October 1968
November 1968
December 1968
266
260
267
286
300
302
306
310
321
326
326
326
290
284
311
303
346
351
DP rate
361.5 to
345 to
424 to
448 to
405 to
412 to
152
150
155
168
167
167
233.5
260
BE aid rate1
132
132
131
131
131
131
140
140
240
235
240
245
300
439.5
420
449
485
456.5
415.6
-
Category A
export rate
68 to
71
2
Category B
export rate
102 to 107
Petrolsum
* w U l \J*L. *-• lAil-L
69
103
108
111
114
103
123
130
133
137
148 to 154
177 to 185
176
211
85
85
85
85
85
85
85
85
199
195
200
214
225
226
229
232
273
277
277
277
239
234
240
257
270
272
275
279
289
293
293
293
85
240
240
240
24O
240
240
240
240
240
300
300
On 27 fey 1968 BE aid rate was abandoned and there was until 17 April 1970 only one uniform rate
for imports financed either through export proceeds or through foreign aid receipts.
2
Category A export rate is the effective rate when there is no overprice (difference between
actual sales price minus check price or not f.o.b, price) or when any proceeds received over and above
the net f.o.b. price are utilized to meet normal commercial expenses, such as commission, rebates and
refunds. It should also be noted that the effective rate in category A is the result after deduction
of 10 per cent ADO tax and up to 22 September 1968, 15 per cent export tax and from 23 September 1968,
the latter tax is only 5 per cent which has now been abolished. Category B rate is the effective rate
as in category A after deduction of 10 per cent ADO tax. Overprice was terminated on 17 April 1970.
^S
°$ \
u> o
\
©
3
H
Table 9 (cont'd). '
End of
BE rate
January 1969
February 1969
March 1969
April 1969
May 1969
June 1969
July 1969
August 1969
September 1969
October 1969
November 1969
December 1969
326
326
326
326
326
326
326
Source:
326
-
326
326
326
326
DP rate
4.00.5
384.
381.5
381.5
378.5
378.5
378.5
378.5
378.5
378.5
378.5
378.5
to
to
to
to
to
to
to
to
to
to
to
to
413
400
384
382
381
379
379
379
379
379
379
379
BE aid rate
-
Category A
export rate
Category B
oaqport rate
277
277
277
277
277
277
277
277
277
277
277
277
293
293
293
293
292
292
292
293
293
293
293
293
Bank of Indonesia
41
(4ft
Petroleum
300
300
300
300
300
' 300
300
300
300
300
300
300
BOP/106/Corr.l
Page 5
Page 31. paragraph hh.
The first sentence should read as follows: "All exports to Mainland China,
Rhodesia, South Africa, Angola and Israel are prohibited."
Page 31. paragraph 4.6
Delete the words "State-trading firms" from the first sentence. Delete the
words "except for batik and handicraft" from the last sentence.
'
Page 31. paragraph A7
Delete the words "such as operating costs and taxes" from the last sentence.
Page 32. paragraph 51
Delete the word "official" from the first sentence. The second sentence
should read as follows: "Since they differ by their basis - transaction vs.
payment - considerable discrepancies have been found to exist between the sets
which it so far has been impossible to reconcile."
Page 51. paragraph 70
The first sentence should read as follows: "Indonesia's coffee production
has maintained an upward trend in the last decade, rising from 84,000 tons in
1959 to 156,000 tons in 1968."
Page 52. paragraph 71
Replace the first two sentences by the following text: "The production
target of 163,000 tons set for 1973 implies only a modest growth of 1 per cent
per annum from the production level of 1968, and is therefore likely to be
exceeded. It can thus be expected that Indonesia will maintain its volume of
exports - subject, of course, to the quota provisions of the International
Coffee Agreement."
Page 52. paragraph 73
The third sentence should read: "In order to improve the trade prospects of
copra producers, a Copra Managing Agency has been established to reorganize the
export and domestic trade."
Page 52. paragraph 73
The last sentence should read: "Besides this contribution,exporters will be
required under the scheme to remit to the Copra Rehabilitation Reserve ... etc."
BOP/106/Corr.l
Page 6
Page 53. paragraph 73
- "
The third sentence should read: "These arrangements would rectify the
neglect of the past." 'Delete the rest of the sentence (i.e. "but are expected,
at best, to arrest the decline without naking any additional contribution to
Indonesia's export earnings.")
-•- —
Page 55. paragraph 78
The fifth sentence should read: "Tobacco has been one of the crops which has
grown in the I9601s although a decline occurred in 1968 which was entirely due to
extremely wet weather conditions."
Page 55. paragraph 79
The second sentence should read: "In view of this fact, and of the fact that
Indonesia contributes only about 2 per cent of the world exports, Indonesia's
export prospects in this crop are not entirely discouraging; however, as
Indonesia exports Plainly cigar leaf, the market for which is highly competitive,
to maintain these exports on a rising trend will require considerable effort."
Page 56. paragraph 81 should read:
-
*
"
"The Government of Indonesia established an Indonesian Pepper Marketing
-Agency. The Agency is an association of producer-exporters and exporters
domiciled in Lampung, whose management is appointed by the Minister of Trade.
Member countries will act for the Agency in all natters concerned with the export
of pepper and participate in preparing official policies in respect to prices>
quality standards and other marketing regulations. "
Pages 57-58. paragraph 87
The third sentence should read: "Some rehabilitation in the post-war period
led to a partial recovery in output and exports but in the 1950's nationalization
of estates and the general deterioration of the economy considerably reduced the
productivity of this sector."
Page 58. paragraph 87
Delete the words:
"last but not least" from the fourth sentence.
Page 58. paragraph 87
Replace the figures "78,000 to 86,000 tons" by "80,000 to 100,000 tons" •
in the sentence ".... tea production has hovered around 80,000 to 100,000 tons".
Page 58. paragraph 37
The last sentence should read: "Now the Government plans to finance the
imports through bank credits and foreign aid."
• •
-mmm
BOP/106/Corr.l
Page 7
Page 59. paragraph 90
The second and third sentences should read: "Indonesia is believed to be
the world's largest producer of mace and nutmeg, the production of which in 1966,
1967 and 1968 reached 5,000, 6,000 and 7,000 tons, respectively. Â high
proportion of this is exported."
Page 60. paragraph 92
Delete the word "Apparently" from the last sentence.
Page 60. Table 28
Replace the figure 439,000 for "other products" by 380,000.
Page 61. paragraph 94
Replace Table 29 by the following table and delete the last sentence.
Table 29
INDONESIAN FORESTRY EXPORTS
1960-1969
1
Teak wood
Year
I960
1961
1962
1963
1964
1965
1966
1967
1968
1969
Source;
Jungle wood
Volume
' Value
(metric tons) : (USl'OOO)
10,233
6,317
3,420
6,169
7,711
9,679
14,827
12,642
27,680
1,222
814
447
892
1,142
1,137
1,544
1,182
2,141
Volume
(metric tons)
90,643
73,932
89,365
81,342
62,076
123,806
187,941
388,228
809,490
Value
(USs^'OOO)
690
514
584
623
674
888
2,021
5,122
8,950
Total
Value
(USl'OOO)
1,912
1,328
1,031
1,515
1,816
2,025
3,565
6,304
11,091
Central Bureau of Statistics.
Page 61, paragraph 97
Delete the last sentence: "Explorations are being carried out, reportedly,
by some foreign firms for copper." and replace by the text: "It should be
mentioned that until to date, the Government has approved six "contracts of work"
of the following foreign companies:
•
BOP/106/Corr.l
Page 8
(i)
NV Billiton Maatschappij (Netherlands) for exploration and exploitation
of tin» Invested capital "or exploration: TTS$1 million;
(ii) Aluminium Company of America (ALCOA), for exploration and exploitation
of bauxite. Invested capital for exploration: US$1.2 million;
(iii) Indonesia Nickel Development Corp. Ltd. (INDC, Japan) for exploration
and exploitation of nickel ore. Invested capital for exploration:
US$0.75 million;
(iv) International Nickel Company of Canada Ltd. (INCO) for exploration and
exploitation of nickel ore. Invested capital for exploration:
US$1.5 million;
(v)
Pacific Nickel (58 per cent .American, 32 per cent Netherlands and
10 per cent Canadian) for exploration and exploitation of nickel ore.
Invested capital for exploration: US$1.5 mi H i on;
(vi) Free Port Sulphur (USA) for exploration and exploitation of copper orea
Invested capital for exploration: US$1.7 million.