It is now or never for Indonesia electronics industry<\/p>\n
Zakki P. Hakim, The Jakarta Post, Jakarta<\/p>\n
Over the last three decades, major Asian countries have managed
\nto improve exports from basic manufacturing products to more
\nsophisticated goods, with one major exception -- Indonesia.<\/p>\n
Aside from natural resource-based products, Indonesia's top
\nmanufacturing exports still revolve around textiles, clothing and
\nfootwear.<\/p>\n
While China, South Korea, Malaysia, Thailand and the
\nPhilippines have been shifting their exports to high-technology
\nproducts, this country has fallen by the wayside in the global
\nsupply chain with respect to high-technology electronics parts
\nand components.<\/p>\n
However, the production of electronic goods has been on the
\nincrease and they were Indonesia's second-largest non-oil and gas
\nexport last year, bringing in around US$7.6 billion to the
\ncountry. But the figure is still a mere 3 percent compared to the
\nestimated combined ASEAN total of $225 billion for the period.<\/p>\n
Facing such a lucrative global electronics market -- with
\ncurrent annual growth reaching 20 percent -- consumer electronics
\nmanufacturers in the country have set a target to double their
\nexports to $15 billion during the next five years.<\/p>\n
\"Even if we managed to double the exports, the figure will
\nstill be less than 10 percent of the current total regional
\nexports,\" said Rachmat Gobel, Indonesian Chamber of Commerce and
\nIndustry (Kadin) vice chairman for industry, technology and
\ntrade.<\/p>\n
\"But we have to start now. Otherwise, neighboring countries
\nlike Thailand and even Vietnam are more than ready to take over
\ninvestment opportunities,\" said Rachmat, who is also chairman of
\nthe Electronics Association (Gabel).<\/p>\n
Speaking to The Jakarta Post, he said Indonesia as the fourth-
\nmost populous country in the world had always been attractive to
\ninvestors and much of its current annual growth of 4 percent to 5
\npercent was due to domestic consumption.<\/p>\n
Indonesians purchasing power per capita had also improved to
\nslightly over $1,000 last year from an average of $600 during
\nlate-1990s economic crisis, he said.<\/p>\n
While Indonesians remain poor compared to people in developed
\ncountries, 33 million low-income families managed to annually buy
\n1.4 million simple radio cassette players, 4.5 million 14-inch
\nand 21-inch televisions, 3.7 million irons, 3.3 million fans and
\n1.9 million water pumps.<\/p>\n
Some 23 million families from the middle to upper income
\nbracket have annually bought two million single-door
\nrefrigerators and 1.7 million washing machines and air
\nconditioners.<\/p>\n
The stronger consumer demand expected to accompany the
\nincreased purchasing power, Rachmat said, would be more than
\nenough to support the development of a domestic electronics
\nindustry and increase sales of locally produced goods in the
\ndomestic market from Rp 9 trillion (US$971.4 million) to Rp 37
\ntrillion during the next five years.<\/p>\n
The numbers coincide with the expansion of locally produced
\nelectronics from 54 percent of the domestic market share to 75
\npercent, according a document obtained by the Post -- Gabel's
\nVision 2010 Electronics Industry Development Strategy in
\nIndonesia.<\/p>\n
Rachmat said the industry needed fresh investment of up to
\n$1.48 billion to double exports and $596.16 million to multiply
\nproduction for the local market.<\/p>\n
The investment, he said, should be prioritized for the
\ndevelopment of high technology and digital electronic products
\nsuch as automatic washing machines, bigger refrigerators and 29
\ninch televisions.<\/p>\n
\"By 2010, we have to have cell phones, digicam and flat screen
\ntelevisions including plasma and liquid crystal models, being
\nproduced here,\" he said.<\/p>\n
Major pre-conditions of attracting investment were to have a
\nstrong support industry for the electronics sector, harmonized
\nindustrial and product standards and competent human resources,
\nhe said.<\/p>\n
Minister of Trade Mari E. Pangestu has stressed that her
\ngovernment wanted the country's electronics sector to grow in
\nline with the rest of East Asia.<\/p>\n
However, the government did not include the sector in its top-
\n10 priority industries in recent planning. Mari told the Post
\nthat the government would adjust the plan by having a trade,
\ninvestment and industrial strategy.<\/p>\n
Rachmat said such a strategy was needed soon or the country
\nwould \"end up producing low-tech electronic goods forever.\"<\/p>\n
He said that over centuries the world's industrial center had
\nmoved from region to region, and today it was in East Asia with
\nChina at its center.<\/p>\n
\"Opportunities like this do not even come twice in every 30
\nyears. It is now or never,\" he said.<\/p>",
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"sponsor": "Okusi Associates",
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