In recent days, President-elect Prabowo Subianto has made a bold statement that has stirred national discourse: the abolition of the import quota system. This proposal, while eliciting mixed reactions, deserves serious consideration as a strategic effort to reform the distribution and regulation of essential commodities. For a country like Indonesia, which has long grappled with stabilizing food prices and protecting household purchasing power, such a policy shift may offer significant potential.
Indonesia’s current import quota system was designed to regulate the supply of crucial goods such as rice, sugar, garlic, beef, and other staples. In times of scarcity, the government authorizes limited import quotas to boost market supply. However, in practice, these quotas often fail to reduce prices. Despite the availability of imported goods, prices remain high. In some cases, quotas have even become tools of market manipulation by groups with exclusive access to import licenses.
The core issue with the quota system lies in its exclusivity and lack of transparency. Only select importers are granted permits, creating an uncompetitive market. This situation paves the way for oligopolistic practices and, in some cases, cartel behaviour, where a small group of actors controls supply and pricing. As a result, consumers are forced to pay inflated prices, even though global market prices or basic production costs are much lower. The current system widens the gap between large and small players in the national supply chain.
Replacing the quota system with a more open approach, such as a transparent, tariff-based licensing system, would likely lead to a healthier market. Importation would no longer be a playground for elite interests but a mechanism for stabilizing prices and ensuring availability. Increased competition among importers would drive prices closer to equilibrium levels. For consumers, this means better access to essential goods at more affordable prices and improved quality.
This reform would also benefit domestic industries that rely on imported raw materials. Sectors such as manufacturing, food and beverages, pharmaceuticals, and small-to-medium enterprises (SMEs) would gain more flexibility in sourcing inputs. Competitive pricing of raw materials would lower production costs and boost the competitiveness of local products both at home and abroad. This could stimulate exports and increase employment opportunities.
Moreover, a more open import regime could positively impact other sectors, including logistics, ports, freight transportation, and warehousing. Increased flow of goods and more efficient distribution channels would strengthen supply chains, making them more resilient to shocks. This would also spur economic development, particularly in eastern Indonesia, which often suffers from high logistics costs.
However, abolishing import quotas must be approached with caution. A large portion of Indonesia’s domestic food producers remains small-scale and vulnerable. These local producers could be easily displaced if the market is flooded with cheaper and more consistent imported goods. Thus, any reform in the import system must be accompanied by robust protection and empowerment policies for local farmers, livestock breeders, and micro-businesses. Government support is essential in the form of production subsidies, access to affordable financing, improved technology, and guaranteed markets for local produce.
Additionally, import oversight and regulation must be enhanced. Without stringent quality control and safety standards, the domestic market could be overwhelmed with substandard imports. Agencies such as quarantine services, customs, the Ministry of Trade, and the Ministry of Agriculture must play a proactive role. The digitization of import processes, data transparency, and the integration of national stock and demand information should be prioritized to ensure a smooth and accountable system.
What is commendable about President Prabowo’s proposal is the political will to evaluate longstanding policies that have become sources of inefficiency. Import regulations can no longer rely on closed, bureaucratic approaches. The global landscape has changed, supply chain disruptions caused by pandemics, geopolitical conflicts, and climate change all highlight the need for a flexible and open system to safeguard economic stability.
Naturally, such a bold policy will attract resistance, especially from groups that have long benefited from the current quota system. However, the government must remain grounded in the principle that public policy should serve the broader interest of the people, not a handful of economic elites. Affordable food prices are not merely an economic issue, they are also a matter of social justice and national stability.
In the long term, reforming the import system can be part of a larger structural transformation of Indonesia’s economy. The government must design a careful transition strategy, involve stakeholders inclusively, and foster public dialogue to ensure that the policy is widely accepted and effectively implemented.
If executed carefully, based on data, transparency, and protection for domestic producers, the abolition of import quotas will not merely be a technical reform, but a strategic move toward a healthier, fairer, and more efficient trade system. The Indonesian people deserve access to high-quality goods at affordable prices. This is where the government must step in—not to restrict the market, but to ensure that it works for everyone.
# @Abdullah A Afifi