Potential exists for strong domestic industrial sector<\/p>\n
Rachmat Gobel, Jakarta<\/p>\n
In recent years, there has been an exodus of international
\ncompanies from Indonesia. Kyocera is just one of the most recent
\nexamples. Because of this exodus, and the reluctance of new
\ninvestment to come into Indonesia, many are claiming that
\nIndonesia is threatened by a \"de-industrialization\" process.<\/p>\n
Yet, in view of our domestic market potential, Indonesia
\nshould be able to establish a strong industrial base from which
\nto achieve sustainable development. Take for example the
\nelectronics industry which I am most familiar with. A strong
\nelectronics industry in Indonesia is very feasible, one that not
\nonly produces end products but also electronic components.<\/p>\n
The component industry supports not only electronics, but is
\ncrucial in other industries as well, such as the automotive
\nsector, which also needs electronics parts.<\/p>\n
The development of both the electronics and the automotive
\nsectors would also encourage the development of the plastics
\nindustry, which contributes a lot to the making of electronic and
\nautomotive products. These industries are interconnected. More
\nimportantly, they are all labor intensive.<\/p>\n
With 220 million people, our domestic market alone is big
\nenough to support the development of the electronics industry. In
\naddition, there is the huge potential of the regional and
\ninternational markets.<\/p>\n
Electronic goods are the country's second largest non-oil and
\ngas exports after textiles and garments. Exports of electronics
\nreached US$7.05 billion in 2004. However, that is a drop in the
\nproverbial bucket compared to the exports from the Philippines
\nand Thailand. Electronics exports from each of those countries
\nreached at least $25 billion last year.<\/p>\n
Indonesia could emulate them by establishing a strong base in
\nthe \"low-tech\" electronics sector by first supplying the domestic
\nmarket as the main priority followed by exporting. \"Low-tech\"
\nelectronics include conventional color televisions,
\nrefrigerators, air conditioners and washing machines. Without
\ndomestic market support, it would be difficult for us to develop
\na strong low-tech industry, much less move into the high-tech
\nsectors.<\/p>\n
However, many problems beset the industry, such as rampant
\nsmuggling, unfavorable tax policies, unattractive labor laws and
\nthe lack of infrastructure. These problems of course apply to
\nmany other Indonesian industries.<\/p>\n
The Indonesian Chamber of Commerce and Industry (Kadin) has
\nsubmitted to the government a road map describing all problems
\nconfronting local industries -- problems that the government
\nneeds to immediately solve in order to boost the private sector
\nand to attract the new investment badly needed to create jobs.<\/p>\n
If the government is able to implement just 50 percent of the
\nrecommendations spelled out in the roadmap, I believe there will
\nbe fresh investment of up to $2 billion in the electronics
\nindustry alone within the next five years.<\/p>\n
The next step that the government needs to take is to
\nformulate its \"target, vision and mission\" for itself to
\nanticipate the ongoing liberalization under the World Trade
\nOrganization. Without a broad overall understanding of where our
\nindustries are heading, our domestic market will be easy pickings
\nfor our neighboring countries. If that happens, we will lose our
\nnational pride and perhaps even our national heritage.<\/p>\n
Take for example, the threat facing our own batik industry.
\nMalaysia, under its new prime minister, Abdullah Badawi, wants to
\nregister a patent for Malaysian batik. If it succeeds in
\nregistering a patent for the word \"batik,\" we may well have to
\npay royalties to Malaysia when we export our own homemade batik.<\/p>\n
To take another example, a tourism association leader told me
\nthat they had to request the Japanese government's permission to
\nuse the song Bengawan Solo in a tourism advertisement. The patent
\nfor the song is held by Japan.<\/p>\n
I have heard a similar story concerning our jamu (herbal
\nmedicine) industry. The jamu industry is an original Indonesian
\nindustry. We have, or should have, exclusive intellectual
\nproperty rights over jamu, which we have inherited from our
\nancestors centuries ago. Yet here too we are facing a threat from
\nMalaysia which also wishes to develop a jamu industry. In fact,
\nwhen people from Brunei talk about jamu, they refer to Malaysia
\nrather than Indonesia.<\/p>\n
Both batik and jamu, as well as other traditional Indonesian
\nindustries absorb a huge number of workers. Sadly, however, we
\nseem unable to protect the intellectual property rights of our
\ntraditional industries. If we cannot protect and develop these
\nindustries, how can we protect and develop the electronics and
\nautomotive sectors? How can we shift to the \"middle-tech\" level
\nof electronics, automotive and other industries?<\/p>\n
This should be our main concern for the next five to 10 years.
\nAnd we need to move fast, with both the private sector and the
\ngovernment working together to build the vision of where we want
\nto head toward.<\/p>\n
The writer is a businessman and Kadin deputy chairman for
\nindustry, technology, fishery and maritime affairs<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/potential-exists-for-strong-domestic-industrial-sector-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}