AIDA forum needs govt support

AIDA forum needs govt support

The following article is an excerpt of a paper presented by
the president of the Indonesian Chamber of Commerce and Industry
(Kadin) Aburizal Bakrie, at a seminar on the Australia-Indonesia
Development Area (AIDA) in Sydney on May 14, 1997.

SYDNEY: In addition to our bilateral-level cooperation, the
forum of the Australia-Indonesia Development Area (AIDA) will
increasingly lead to a more cooperative mind-set, particularly
among private Australian and Indonesian businesses.

This will help to underpin our economic fortunes as well as
social development. And on a broader scale, such a strategic
vision or mind-set will also help to underpin APEC's cooperative
peace and progress well into the 21st century.

Through the newly-created bilateral forum of AIDA, as it has
been proposed, our two private sectors can deepen and further
expand their cooperative initiatives. I envision that AIDA will
not just involve trade and trade-related activities, but will be
a widely-encompassing arrangement cutting across a range of
sectoral and intersectoral areas. These include new finance and
capital market development, technological and human resource
development programs, investment in infrastructure and
infrastructure-related sectors, to mention but a few.

Under AIDA, our initiatives can be focused, in the early steps
of this long journey, on two main agendas. First, is identifying
opportunities for a more profitable private sector cooperation.
In particular, opportunities that will directly and indirectly
actualize market potential and the economic assets of the people
within the AIDA region: namely Kalimantan, Sulawesi, Maluku,
Irian Jaya, East and West Nusa Tenggara, Bali and East Timor.
Second, is finding and solving constraints and problems caused
either by the existing macroeconomic policies or the procedures
in the real sector themselves.

What is clear is that the forum of AIDA must be fully
supported by our respective governments. Since the constraints
and problems need policy adjustment or even brand new policies,
it is heartening to note that the Indonesian government has
already committed to part of the drive of deregulation,
debureaucratization and decentralization.

There are, for example, the fiscal incentives available for
investment in growth node areas located in the eastern part of
Indonesia -- or the region covered by AIDA. The Indonesian
government is also willing to review the policies and procedures
on expatriate work permits and allow more qualified Australian
professionals and managers to directly assist private activities
in the AIDA area -- as part of the environment for business and
investment cooperation between us.

For concrete, effective and efficient reasons, the first
agenda could be organized in detail or sector by sector; whereas
the second one should be proposed through a case-based approach.
This will enable the private sector and the government to quickly
and adequately make the necessary proactive coordination between
them. So AIDA will soon be an effective complementary vehicle for
all of us to boost our bilateral-level economic cooperation.

Nonetheless, since we perceive the economy is the deus ex
machina, where the private sector's alliances and initiatives are
the most suitable keys to every lock of every window of
opportunity, I believe that what we have established so far still
needs constant and continuous evaluation. For this, I think all
of us should proactively encourage and promote the four crucial
interrelated prerequisites for the AIDA cooperation to be
successful.

First, is the establishment of the most supporting business
investment policies possible, in the sense of being pragmatic and
productive. This will lead to productive and competitive
alliances among our businesses, not just for their own financial
gains but also for the interest of our society at large.

Second, is the concentration on economic cooperation and the
turn away from political and ideological prejudice. History has
told us that this prejudice will always restrict the inflow of
necessary information; stifle our commitment, initiatives and
creativity and limit our ability to respond effectively both to
the domestic dynamism and to the changes occurring in the global
business marketplace.

Third, is the establishment of national and regional dynamic
stability. Of course we do not intend to discard our unique
tradition and value systems, but the absence of societal
disharmony or disorder is economically more demanding. That is
why we need to foster sincere tolerance and respect for, and
appreciation of sociocultural pluralism, as a crucial part of our
social and psychological transformation.

Fourth, is the development of an open and equal partnership
structure that accommodates not only the most productive and
modern sector of the economy, but also the interests of our local
small and medium enterprises (SMEs). Supportive market-driven
enterprises will undoubtedly be a pivotal component in the
continued dynamic progress of our economies, and more importantly
for Indonesian market reform itself. Cooperative and yet suitable
opportunities must therefore be available to all of them, in
order to boost AIDA's full benefits.

Indonesian enterprises are still technologically undeveloped,
commercially and financially lacking in access, and therefore
economic power and resilience. But they do have great powers of
endurance, strong determinism and ethical integrity -- the
entrepreneurial spirit some of us seem to be lacking.

As two close neighboring economies, we have both recognized
the potential for the exploitation of economic complementaries
and synergies, primarily through private sector initiatives -- on
account of our economic dynamism and diversity. With its huge
population and a newly-awakening middle income market, Indonesia
is a very hungry market not just for consumer and capital
products. Equally important is Australia's investment capacity;
expertise; science-based technology, technical and managerial
know-how.

In turn, Indonesia must understand that the importance of the
Australian market lies not only in its capacity to absorb the
Indonesian offerings -- particularly raw materials for Australian
industries to keep running. It is also a source of perfecting its
knowledge-based industrial capabilities, the things that need to
be spread over a wide range in order to gain from the synergistic
nature of today's industrial wave.

Only by meeting the needs of newly-constructed assumption and
perception, can we envision the most productive business and
investment cooperation among our two private sectors.
Fortunately, we have agreed that the central aim of AIDA is to
improve the conducive environment for trade and investment of the
private sector, especially between the Indonesian region covered
by AIDA and Australia -- in addition to the memorandum of
understanding between Indonesia and Australia's Northern
Territory, for economic cooperation in the eastern area of
Indonesia.

What we need to profoundly discuss and observe is the
implementation procedures and activities. From an Indonesia
perspective, the main concern is whether this cooperation can
truly actualize the economic potentials of the region; and
whether the process and its outcome can further mobilize the role
as well as market leverage of Indonesian enterprises.

I think the section on concurrent sectoral meetings of this
timely seminar, can closely observe this specific end in order
for us to achieve long-term results. The alignment and
empowerment of Indonesian enterprises, particularly those in the
AIDA region, could be a very convincing beginning. As a matter of
deep commitment and urgency, I suggest that AIDA set the target
of leveraging participation of the enterprises in the more
productive sectors of the economy, commensurate with the
Indonesian development target to alleviate poverty by the year
2003.

There is therefore a need for instruments and mechanisms which
are responsive to this dimension in AIDA cooperative activities.
Educational and training development design, as well as reshaping
the legal and administrative systems will further aid this
cooperation, which must also be enterprise-friendly.

The next priority could be to provide the necessary trade and
investment infrastructure such as telecommunications and
information and transportation facilities, which offer huge
opportunities for our Australian business counterparts. The
Australian government should therefore develop an economic policy
of active engagement with the Indonesian infrastructure projects.
The Indonesian infrastructure sector for the next 10 years alone
needs US$200 billion investment.

One objective of AIDA is to accelerate economic development
and to strengthen our growth footing. Investment activities will
undoubtedly be the main determinant factor. In order to encourage
investment flows into AIDA, the availability of fiscal incentives
in certain forms, becomes important. And they are now available,
if the arrangement is right.

Window: Indonesian enterprises are still technologically
undeveloped, commercially and financially lacking in access, and
therefore economic power and resilience.