ENGLISH LANGUAGE

Fifit Trry Wahyunny 12212932 1EA18

Faculty Economy in University of Gunadarma 2013

High Cost Economy in Indonesia

High Cost Economy in Indonesia and Indonesian Competitiveness Implications. Implementation of the ASEAN - China Free Trade Area (ACFTA) can be regarded as an opportunity for the domestic industry to expand into China and Southeast Asia markets. However, this opinion is still doubtful due to the fact that the competitiveness of domestic industries Indonesia is relatively lower when compared with China and ASEAN member countries another.

For example, X products made in China that have very cheap prices and huge production scale is difficult to rivaled by Indonesia, making Indonesia the low competitiveness of the product X when compared with China. In addition to external factors, there are also internal factors that determine the competitiveness of the product, especially with regard to domestic factors, including human resources / employment, investment, production costs, and technology. Internal factors that do need improvement and repair via a comprehensive government policy.

In addition, the regional minimum wage in urban areas are higher to make the company a lot of building factories and hiring workers in rural areas are lower minimum wage. This would then have implications for the rising cost of transportation and supporting infrastructure expenditure (both of these aspects will be discussed in the next section). Bureaucracy and political factors believed to be one of the main causes of high cost economy in Indonesia.

"We continue to encourage local governments to improve the climate of employment in the region, by eliminating the practices of extortion, simplify licensing convoluted and unclear charges that had been burdening other entrepreneurs," business in Indonesia can raise workers' wages when a decline in the cost of production, the emphasis (high cost economy), improvement of infrastructure and processes are easy and inexpensive.

"The government continues to try to find a system of remuneration that berasaskan justice, well being in accordance with the growth and development of the Indonesian economy. But certainly the workers should be paid a decent wage and welfare, so that the process of industrial production continued to increase and to boost up the economy of the country, with suppressed high cost economy, wages will rise, increasing labor productivity and worker well-being can be achieved. " is ultimately the competitiveness of industries in Indonesia will increase and attract investors to expand employment opportunities that people need,"

Referensi
(http://en.voi.co.id/voi-news/2733-indonesian-govt-continues-to-reduce-high-cost-economy)

(http://www.antaranews.com/berita/341244/muhaimin-tekan-high-cost-economyagar-upahpekerjanaik)