A conversation took place in a modest house, one with unplastered

A conversation took place in a modest house, one with unplastered
walls and the exposed roof covered in cobwebs -- in a traditional
fisherfolk's village in Labuan, Banten, some five hours drive
from Jakarta.

The house belongs to a neighborhood unit (RT) chief and he was
talking with his son, who had returned from working in Malaysia.

"I am an IT (information technology) engineer and worked on
some projects with companies in Malaysia," said the 27-year-old
son, Tubagus Ari, who helped Banten provincial administration
develop its www.banten.go.id website.

"Working abroad is more challenging, particularly in Malaysia,
which is very accommodative in terms of technology," Ari said.
"To be honest, this country lags way behind in technological
advancement."

Believe it or not, Ari explained, some of the best IT
engineers working in Malaysia and Singapore are Indonesians. Yet,
the country's information and communications infrastructure lags
behind that of neighboring countries.

Put simply, Indonesia is all brain without a functioning body.
And the brains have chosen to move to countries where the work is
better.

The local information and communications technology (ICT)
industry has long been without guidelines, responding late to
changes in the global forum.

Bureaucracy-wise, despite fears of reemerging information
censorship, the transformation of the office of the state
minister of communications and information into a portfolio
Ministry of Communications and Information in late January may be
promising.

Among the ministry's technical posts are the wireless
technology and information infrastructure directorate general,
which will soon design an ICT road map with the Ministry of
Transportation's post and telecommunication directorate general.

The communications ministry hopes to more appropriately
allocate existing infrastructure such as frequencies.

The Ministry of Industry will support the promised development
through its new transportation and ICT industry directorate
general.

They should also put high on their agenda the proper
utilization of ICT for the democratization of information instead
of only the generation of income.

And more importantly, the government needs to speed up the
development of ICT infrastructure.

While the development of countries is increasingly measured by
their bandwidth per capita, only about 4 percent of Indonesia's
220 million people enjoy the privilege of connectivity, 2004 data
from the International Telecommunications Union (ITU) reveals.

Currently there are 8.7 million fixed-line and around 40
million cellular subscribers here.

By and large, the nation is lagging behind its Asian peers in
its telecommunications penetration index -- the ratio of
telephone lines in service or cellular subscribers per 100 people
-- (4.2 for fixed line and 12.43 for cellular).

In comparison, Malaysia's telephone penetration index stood at
about 25 percent in 2003.

At present, urban areas, such as Greater Jakarta, have a
penetration index for fixed lines of more than 30 percent, while
at the same time, regions in most parts of the country have an
index of less than 5 percent.

Currently, only 4.4 million of the country's population have
computers and Internet connections. Other countries in the Asian
region have reached at least 5 percent of their populations.

It is very unfortunate as 1 percent teledensity equals 4
percent economic growth.

Getting connected could also significantly lower the high cost
economy that burdens the competitiveness of Indonesian products
in the global market.

In Singapore, paperwork is completed on-line before ships
actually dock, saving a lot of time and increasing the efficiency
of its ports.

Indonesia, although it has talked about e-government, is yet
to reach such a level of efficiency, mainly due to inadequate ICT
infrastructure.

Geographical features, for one, is among Indonesia's
challenges in developing telecommunications infrastructure.

Unlike continental Thailand or relatively small Singapore,
Indonesia has to connect separate islands of varying terrain,
requiring a good mix of both satellite and fiber optic
connections, especially where traffic is high.

Earlier this year, PT Telekomunikasi Indonesia (Telkom), the
country's largest telecommunication firm, and Telekom Malaysia
Berhad opened a new fiber optic network worth US$11 million in
investment on the Dumai Melaka Cable System (DMCS).

The project connects the two countries and -- to Indonesia's
benefit -- their cities with western Europe and the U.S.

Indonesia earlier cooperated with Singapore Telecommunications
(SingTel) and the Communications Authority of Thailand (CAT) in
operating a similar fiber optic network connecting the three
countries.

Last month, Telkom launched its second satellite, the $170
million Telkom-2, to replace outdated Palapa B4.

Aside from this additional backbone infrastructure, the only
other telecommunication project on bid at January's
Infrastructure Summit, which requires a $900 million investment,
has yet to attract any investors.

The Palapa Ring O2R project is aimed at connecting Indonesian
cities using a 36,000-kilometer-long fiber optic network with a
data carrying capacity of between 320 gigabytes per second to 40
trillion bytes per second.

Among other problems hampering larger investments in
telecommunications infrastructure is the lack of a tariff-and-
costs-related regulation.

Former transportation minister Giri Suseno suggested that the
government issue more network facilities provider licenses with
incentives, such as lower licensing fees.

Given the scale of the investment required to build the
infrastructure, the government also needs to promote the
development of local manufacturers that support the sector, so
that they can supply cheaper components for infrastructure
projects.

Data from telecommunications service providers show that the
telecommunications sector would need yearly hardware supplies
from the supporting manufacturing industry totaling Rp 22
trillion ($2.4 billion) to Rp 30 trillion.

Domestic ICT manufacturers -- started in the mid-1970s and
pioneered by state-owned PT INTI and the National Electronics
Agency (LEN) and later followed by several private companies --
are estimated to meet only 2 percent or 3 percent of the demand.

Indonesia needs to jump ahead in developing ICT industry
clusters to speed up the transfer of technology if it is to
reduce dependency on imported hardware.

The country has to avoid the subsector from developing into
mere assemblers, as happened with the automotive industry.

Thailand has stolen the show by setting up ICT development
centers in several of its 70 provinces, while Indonesia might
have a promising start in the Jababeka Industrial area, west of
Jakarta.

With the Asia Pacific's IT market projected to grow at an
annual compound rate of 8.9 percent from 2004 to 2009, outpacing
the global expansion of 6.1 percent, Indonesia could actually
gain a share.

At present, Indonesians are just mere consumers in the ICT
market. Furthermore, ICT has mainly been used for more
materialistic reasons, with people buying cellular phones for
style and prestige without maximizing their functions.

What the country needs is a functioning body to accommodate
powerful brains, like Ari and his restless energy, and deter
those with destructive designs, like hackers and the creators of
cyber wars.

If the government cannot provide the needed investment for the
infrastructure, the least it could do is formulate comprehensive
guidelines.