AIDA forum needs govt support<\/p>\n
The following article is an excerpt of a paper presented by
\nthe president of the Indonesian Chamber of Commerce and Industry
\n(Kadin) Aburizal Bakrie, at a seminar on the Australia-Indonesia
\nDevelopment Area (AIDA) in Sydney on May 14, 1997.<\/p>\n
SYDNEY: In addition to our bilateral-level cooperation, the
\nforum of the Australia-Indonesia Development Area (AIDA) will
\nincreasingly lead to a more cooperative mind-set, particularly
\namong private Australian and Indonesian businesses.<\/p>\n
This will help to underpin our economic fortunes as well as
\nsocial development. And on a broader scale, such a strategic
\nvision or mind-set will also help to underpin APEC's cooperative
\npeace and progress well into the 21st century.<\/p>\n
Through the newly-created bilateral forum of AIDA, as it has
\nbeen proposed, our two private sectors can deepen and further
\nexpand their cooperative initiatives. I envision that AIDA will
\nnot just involve trade and trade-related activities, but will be
\na widely-encompassing arrangement cutting across a range of
\nsectoral and intersectoral areas. These include new finance and
\ncapital market development, technological and human resource
\ndevelopment programs, investment in infrastructure and
\ninfrastructure-related sectors, to mention but a few.<\/p>\n
Under AIDA, our initiatives can be focused, in the early steps
\nof this long journey, on two main agendas. First, is identifying
\nopportunities for a more profitable private sector cooperation.
\nIn particular, opportunities that will directly and indirectly
\nactualize market potential and the economic assets of the people
\nwithin the AIDA region: namely Kalimantan, Sulawesi, Maluku,
\nIrian Jaya, East and West Nusa Tenggara, Bali and East Timor.
\nSecond, is finding and solving constraints and problems caused
\neither by the existing macroeconomic policies or the procedures
\nin the real sector themselves.<\/p>\n
What is clear is that the forum of AIDA must be fully
\nsupported by our respective governments. Since the constraints
\nand problems need policy adjustment or even brand new policies,
\nit is heartening to note that the Indonesian government has
\nalready committed to part of the drive of deregulation,
\ndebureaucratization and decentralization.<\/p>\n
There are, for example, the fiscal incentives available for
\ninvestment in growth node areas located in the eastern part of
\nIndonesia -- or the region covered by AIDA. The Indonesian
\ngovernment is also willing to review the policies and procedures
\non expatriate work permits and allow more qualified Australian
\nprofessionals and managers to directly assist private activities
\nin the AIDA area -- as part of the environment for business and
\ninvestment cooperation between us.<\/p>\n
For concrete, effective and efficient reasons, the first
\nagenda could be organized in detail or sector by sector; whereas
\nthe second one should be proposed through a case-based approach.
\nThis will enable the private sector and the government to quickly
\nand adequately make the necessary proactive coordination between
\nthem. So AIDA will soon be an effective complementary vehicle for
\nall of us to boost our bilateral-level economic cooperation.<\/p>\n
Nonetheless, since we perceive the economy is the deus ex
\nmachina, where the private sector's alliances and initiatives are
\nthe most suitable keys to every lock of every window of
\nopportunity, I believe that what we have established so far still
\nneeds constant and continuous evaluation. For this, I think all
\nof us should proactively encourage and promote the four crucial
\ninterrelated prerequisites for the AIDA cooperation to be
\nsuccessful.<\/p>\n
First, is the establishment of the most supporting business
\ninvestment policies possible, in the sense of being pragmatic and
\nproductive. This will lead to productive and competitive
\nalliances among our businesses, not just for their own financial
\ngains but also for the interest of our society at large.<\/p>\n
Second, is the concentration on economic cooperation and the
\nturn away from political and ideological prejudice. History has
\ntold us that this prejudice will always restrict the inflow of
\nnecessary information; stifle our commitment, initiatives and
\ncreativity and limit our ability to respond effectively both to
\nthe domestic dynamism and to the changes occurring in the global
\nbusiness marketplace.<\/p>\n
Third, is the establishment of national and regional dynamic
\nstability. Of course we do not intend to discard our unique
\ntradition and value systems, but the absence of societal
\ndisharmony or disorder is economically more demanding. That is
\nwhy we need to foster sincere tolerance and respect for, and
\nappreciation of sociocultural pluralism, as a crucial part of our
\nsocial and psychological transformation.<\/p>\n
Fourth, is the development of an open and equal partnership
\nstructure that accommodates not only the most productive and
\nmodern sector of the economy, but also the interests of our local
\nsmall and medium enterprises (SMEs). Supportive market-driven
\nenterprises will undoubtedly be a pivotal component in the
\ncontinued dynamic progress of our economies, and more importantly
\nfor Indonesian market reform itself. Cooperative and yet suitable
\nopportunities must therefore be available to all of them, in
\norder to boost AIDA's full benefits.<\/p>\n
Indonesian enterprises are still technologically undeveloped,
\ncommercially and financially lacking in access, and therefore
\neconomic power and resilience. But they do have great powers of
\nendurance, strong determinism and ethical integrity -- the
\nentrepreneurial spirit some of us seem to be lacking.<\/p>\n
As two close neighboring economies, we have both recognized
\nthe potential for the exploitation of economic complementaries
\nand synergies, primarily through private sector initiatives -- on
\naccount of our economic dynamism and diversity. With its huge
\npopulation and a newly-awakening middle income market, Indonesia
\nis a very hungry market not just for consumer and capital
\nproducts. Equally important is Australia's investment capacity;
\nexpertise; science-based technology, technical and managerial
\nknow-how.<\/p>\n
In turn, Indonesia must understand that the importance of the
\nAustralian market lies not only in its capacity to absorb the
\nIndonesian offerings -- particularly raw materials for Australian
\nindustries to keep running. It is also a source of perfecting its
\nknowledge-based industrial capabilities, the things that need to
\nbe spread over a wide range in order to gain from the synergistic
\nnature of today's industrial wave.<\/p>\n
Only by meeting the needs of newly-constructed assumption and
\nperception, can we envision the most productive business and
\ninvestment cooperation among our two private sectors.
\nFortunately, we have agreed that the central aim of AIDA is to
\nimprove the conducive environment for trade and investment of the
\nprivate sector, especially between the Indonesian region covered
\nby AIDA and Australia -- in addition to the memorandum of
\nunderstanding between Indonesia and Australia's Northern
\nTerritory, for economic cooperation in the eastern area of
\nIndonesia.<\/p>\n
What we need to profoundly discuss and observe is the
\nimplementation procedures and activities. From an Indonesia
\nperspective, the main concern is whether this cooperation can
\ntruly actualize the economic potentials of the region; and
\nwhether the process and its outcome can further mobilize the role
\nas well as market leverage of Indonesian enterprises.<\/p>\n
I think the section on concurrent sectoral meetings of this
\ntimely seminar, can closely observe this specific end in order
\nfor us to achieve long-term results. The alignment and
\nempowerment of Indonesian enterprises, particularly those in the
\nAIDA region, could be a very convincing beginning. As a matter of
\ndeep commitment and urgency, I suggest that AIDA set the target
\nof leveraging participation of the enterprises in the more
\nproductive sectors of the economy, commensurate with the
\nIndonesian development target to alleviate poverty by the year
\n2003.<\/p>\n
There is therefore a need for instruments and mechanisms which
\nare responsive to this dimension in AIDA cooperative activities.
\nEducational and training development design, as well as reshaping
\nthe legal and administrative systems will further aid this
\ncooperation, which must also be enterprise-friendly.<\/p>\n
The next priority could be to provide the necessary trade and
\ninvestment infrastructure such as telecommunications and
\ninformation and transportation facilities, which offer huge
\nopportunities for our Australian business counterparts. The
\nAustralian government should therefore develop an economic policy
\nof active engagement with the Indonesian infrastructure projects.
\nThe Indonesian infrastructure sector for the next 10 years alone
\nneeds US$200 billion investment.<\/p>\n
One objective of AIDA is to accelerate economic development
\nand to strengthen our growth footing. Investment activities will
\nundoubtedly be the main determinant factor. In order to encourage
\ninvestment flows into AIDA, the availability of fiscal incentives
\nin certain forms, becomes important. And they are now available,
\nif the arrangement is right.<\/p>\n
Window: Indonesian enterprises are still technologically
\nundeveloped, commercially and financially lacking in access, and
\ntherefore economic power and resilience.<\/p>",
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