JAKARTA – Indonesian Institute Development for Economic and Finance (Indef) economist Bhima Yudhistira said that the election of Joe Biden as president of the United States (US) is a new era for the global economy. Indonesia will also be positive.
And by its challenges in the policies economics of the Biden era or often referred to as Bidenomics.
The greatest potential for Indonesia is the increase in the value export of several commodities. Starting from clothes, apparel, and footwear to fishery products that have been exported to Uncle Sam’s country.
This increase is because Biden plans to raise the federal minimum wage which will increase the purchasing power of the US public, especially the middle and lower class. “This will have an impact on product demands, including Indonesian products,” said Bhima in the 2021 Market Outlook Webinar, Tuesday (17/11).
The Indonesian Government Should Immediately Pay Attention to Environmental Certification of Export Products
Meanwhile, the biggest challenge for Indonesia is products that are directly and indirectly related to the environment. Because, Bhima said, Bidenomics will focus on pro-environmental policies. No exception for Indonesia’s export commodities.
Bhima explained that organic certification and environmental certification are likely to apply in a more disciplined manner to export products such as Crude Palm Oil (CPO) and coffee from Indonesia. “Then the health certification is stricter,” he said.
Bhima said that environmental certification should start to get the attention of the government and Indonesian stakeholders. In the future, products offered in US retail may have to go through a rigorous audit process first. Including aspects of new land clearing and land degradation for the production of these products.
Therefore, Bhima said. It should require Indonesian companies to have standards related to the certification of sustainable palm oil companies such as Indonesia Sustainable Palm Oil (ISPO) or the Roundtable Sustainable Palm Oil (RSPO).
The urgency is even higher considering the possibility of applying non-tariff barriers to trade in the Bidenomics era. In contrast to Donald Trump’s policy of using tariffs to inhibit exports from other countries. We expect Biden to be more active in non-tariff barriers to reduce the trade balance deficit.
One of the non-tariff barriers that could be imposed by Biden is related to environmental certification. This means that products that do not have pro-environmental certification will be subject to tariffs or be given difficulties in accessing the US market.
“They must anticipate this,” said Bhima