Analysts call for "Indonesia Incorporated"

Analysts call for "Indonesia Incorporated"

JAKARTA (JP): Rapid changes towards globalization of economic
activities require Indonesian firms to adjust their operational
strategies and the government to introduce more deregulation,
analysts say.

Many feel that an interlocking economy similar to that of
Japan may be the answer.

"The government and private companies must adjust quickly or
Indonesia will fall behind in the global economy," Hadi
Soesastro, an economist from the Centre for Strategic and
International Studies (CSIS), said in a seminar here yesterday.

Hadi said the current economic trends were forcing Indonesian
firms to gain access to information about developments in global
and regional markets, technology and skilled workers.

The economist also said that the government must adopt
policies to shape a condition which allows companies to have
access to those "indispensable items."

"The government can become, for example, a sort of a 'clearing
house' of information which will then be passed on to various
companies," he said.

He asserted that quick adjustments to the changing world
economy can only be achieved with a close coordination between
the government and the business sector. "In short, we need an
Indonesian Incorporated."

Transparency

Nevertheless, Hadi warned that "Indonesian Incorporated" must
be based on transparency and accountability. This is yet to be
fully achieved, he said.

The analyst also argued that the government needs to develop
focused technological and educational policies to quicken the
required adjustment process.

"It is unfortunate that tax incentives are not allowed under
our tax laws," Hadi said.

Indonesia's taxation policies only give incentives for
companies which invest in this country's under developed eastern
parts.

On the same occasion, economist Dorodjatun Kuntjara Djakti
from the University of Indonesia also emphasized that Indonesian
firms must have an access to global information on the latest
technology. "Without it, you will be in a state of panic,"
Dorodjatun said.

The economist also appealed that the government be more
aggressive in promoting foreign capital to expand the country's
industrial sector which presently only contributes 10 percent of
the Gross Domestic Production (GDP).

Dorodjatun said that the non-oil industrial sector should be
expanded to 20 percent of GDP from only 15 percent at present.
(04/icn)