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🇮🇩 Indonesia /Economy & Trade

Economist: State-Owned DSI Can Strengthen Export Oversight, Curb Capital Leakage

From Republika · () Indonesian

Translated from Indonesian and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources New plan
  • PT Danantara Sumberdaya Indonesia (DSI) has a strategic opportunity to improve export oversight and prevent national wealth leakage, according to economist Edi Sewandono.
  • DSI can help build an integrated system for monitoring export prices, volumes, payments, and destinations, addressing a gap where exporters previously dealt directly with foreign buyers.
  • Strengthening governance through data integration, technology, and effective oversight is crucial for DSI's success, especially in facing challenges from major players in strategic commodity trade.

Economist Edi Sewandono of the Nagara Institute believes PT Danantara Sumberdaya Indonesia (DSI) is strategically positioned to bolster export supervision and close avenues for capital leakage from the state. He argues that strengthening governance requires integrating data, leveraging technology, and implementing robust oversight mechanisms to ensure export transactions are transparent.

There is a gap between the large contribution of Indonesian exports and the still small state financial revenue.

— Edi SewandonoExplaining the economic discrepancy that DSI aims to address.

Sewandono highlighted a significant gap between Indonesia's substantial export contributions and the relatively low state revenue generated. Previously, exporters could directly engage with foreign buyers, bypassing any aggregated payment mechanisms. The emergence of DSI presents an opportunity to establish a more integrated system capable of overseeing prices, volumes, payments, and the ultimate destinations of exports.

However, Sewandono cautioned that such integration necessitates strong support from data and financial infrastructure, along with oversight mechanisms designed to reduce information asymmetry. He also warned that DSI will likely face resistance from powerful entities that have historically influenced Indonesia's strategic commodity trade.

DSI's success will largely depend on its courage to maintain independence while executing the national export supervision mandate.

— Edi SewandonoHighlighting the importance of DSI's autonomy.

"DSI's success will largely depend on its courage to maintain independence while executing the national export supervision mandate," Sewandono stated. He proposed that DSI focus on monitoring and supervising transactions, rather than handling all trade functions, suggesting the government could utilize existing trading companies. This approach, he believes, would preserve the reform objectives without exposing the state to undue financial risks in commodity trading.

The key is strengthening governance so that there is an optimization of Indonesia's state resources that provides optimum value.

— Febriany EddyExplaining the core objective behind DSI's formation.
About this summary

Originally published by Republika in Indonesian. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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