Government blasts for neglecting electronics sector<\/p>\n
Zakki P. Hakim, The Jakarta Post, Jakarta<\/p>\n
\"The government has been neglecting the electronics industry,\"
\nAdhi Sukmono, secretary of the Association of Indonesia
\nElectronic and Electrical Appliances Industries, said on
\nWednesday during a discussion between industry players and
\njournalists.<\/p>\n
The remarks immediately received the support of other
\nbusinessmen participating in the discussion, which was organized
\nby the Indonesian Chamber of Commerce and Industry (Kadin) and
\nthe Electronics Association (Gabel).<\/p>\n
Among the industry players were the top executives of major
\nbrands such as Panasonic, Toshiba, LG Electronics, Cosmos and
\nAkari.<\/p>\n
Adhi blamed lack of knowledge about the industry on the part
\nof government officials for the \"negligence and resulting series
\nof misguided policies\".<\/p>\n
Kadin vice chairman for industry, technology and the marine,
\nRachmat Gobel, said the latest government move that showed this
\nnegligence was the omission of the electronics industry from its
\ntop 10 priority industries under the country's five year plan
\n(RPJM).<\/p>\n
Indonesia's electronics sector is the biggest non-oil and gas
\nsector after textiles and clothing, with last year's exports
\namounting to approximately US$7.6 billion.<\/p>\n
\"It is important to have government commitment to an industry
\nand, eventually, the provision of incentives,\" said Rachmat.<\/p>\n
He emphasized that the sector merited attention, considering
\nits export performance and labor intensive nature. \"If we get the
\nincentives, we can double our exports to $15 billion in five
\nyears.\"<\/p>\n
The electronics makers urged the government to consider the
\nfact that it was more profitable to open a factory and produce
\ngoods here rather than merely importing them.<\/p>\n
\"It is unfair that a brand that has no factory in the country
\nand relies solely on imports can gain a similar market share to
\nother brands that have made big investments,\" said Kadin's
\nIndonesia-Japan Economic Committee secretary-general Heru
\nSantoso.<\/p>\n
Heru stressed that the government needed to consistently
\nprovide tax relief for companies that invested in research and
\ndevelopment.<\/p>\n
As an example, he said that an electronics maker in Malaysia
\ncould have its total taxes halved if the firm, among other
\nthings, invested in R&D, provided training, invested in property,
\nused environmental protection equipment or entered the export
\nmarket.<\/p>\n
Moreover, Ali Soebronto Oentaryo, managing director of PT
\nPanggung (producer of local brand Akari), said local and foreign
\ninvestors were reluctant to set up shop here as importing raw
\nmaterials was much more expensive than importing the end product,
\ndue mainly to the higher import duties imposed on key materials
\nsuch as steel.<\/p>\n
He said that when the business climate encouraged firms to
\nimport rather than produce, downstream industries would
\neventually die and upstream supporting industries would follow
\nsuit.<\/p>\n
\"Without strong supporting industries producing parts and
\ncomponents, who will want to open a factory here,\" Ali said.<\/p>\n
He added that it was imperative for the government to restrict
\nelectronics imports.<\/p>\n
\"If the government can restrict the importation of drugs using
\nvarious safety and health standards, logically the same can be
\napplied to electronics imports,\" he said.<\/p>\n
The industry players expressed concern about increasing
\nimports of cheaper electronics products, mostly from China, that
\nthey said failed to meet health and safety standards.<\/p>\n
According to PT Indonesia Epson Industry vice chairman Eiichi
\nAbe, contrary to the common perception, Indonesia actually
\nenjoyed the same level of competitiveness as China, especially as
\nregards labor.<\/p>\n
However, Abe said the main distinguishing factors were that
\nChina was far stronger in precision injection, molding processes,
\nengineering design and R&D, which was a result of the active
\ninvolvement of universities there.<\/p>\n
\"Aside from the universities' roles, China has numerous
\nexporting firms and strong supporting industries,\" he said.<\/p>\n
Rachmat added that the Chinese government had a long-term and
\ndetailed plan for the building up of its manufacturing sector,
\nincluding availing of technologies introduced to the country by
\ninvestors.<\/p>\n
\"For example, the Chinese government sent 5,000 workers to
\nwork in one industrial cluster full of foreign factories. After a
\ncertain period, it then moved the workers to various clusters of
\ndomestic factories, to which they brought their newly acquired
\nskills,\" he said.<\/p>\n
\"Has our government thought about such a plan?\" he asked.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/government-blasts-for-neglecting-electronics-sector-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }