Competitive grade edge called engine of growth
Competitive grade edge called engine of growth
JAKARTA (JP): Economists said at a seminar yesterday that
modernization in the industrial and trade sectors is the key to
the maintenance of the country's competitive edge before entering
the era of globalization and liberalization.
"And modernization can happen if it is supported by a
transparent business environment, consistent government policies,
fairness and equal treatment and a strong political commitment,"
the statement concluded.
Yesterday's seminar was held to commemorate the 79th birthday
of senior economist Sumitro Djojohadikusumo.
Dorodjatun Kuncoro-jakti, a senior lecturer at the University
of Indonesia, who acted as a panelist at yesterday's seminar,
talked about trade being the engine of growth.
"And trade has played an important role in stabilizing the
international inflation rate, which currently stands at 4 to 5
percent worldwide, against Indonesia's figure of 8 to 10
percent," he noted.
Dorodjatun said international trade has witnessed a more
convincing availability of products with faster product
distribution.
On the industry side, Dorodjatun also cited the latest trend
in the creation of global consortiums, particularly in the
telecommunications and aircraft industries, to collaborate in
designing and manufacturing new products.
"The trend is based on an assumption that many products will
gradually lose their profit margin. And a larger volume and
distribution is expected to maintain a bigger profit margin," he
said.
The current situation, according to Dorodjatun, highlights the
inter-nation, inter-industry and intra-region characteristics of
international trade and industry.
Dorodjatun and another panelist, Herman Z. Latief, shared the
idea that in a situation in which consumers' interests easily
change, product production should be based on the right idea,
right time and right entry point.
"Moreover, a product's life cycle is very short now,"
Dorodjatun said.
Accelerating industrial and trade development, according to
Dorodjatun and Latief, will eventually be pointless if it is done
without clear objectives.
Latief cited as an example that England used to be a major car
producer in Europe. But today, the English automotive industry
has been left behind by other competitors.
Latief also said that Malaysia with its "Proton Saga" national
car, currently faces serious difficulties owing to high
production costs.
He said that in the automotive sector, Indonesian firms still
import thousands of spare parts and components.
"And I would say that the situation in the automotive industry
reflects the situation in other industries in this country,"
Latief noted.
Another economist, Mohamad Sadli, questioned whether
Indonesia's national car project, sponsored by Hutomo Mandala
Putra's PT Timor Putra Nasional, is in line with the country's
efforts to modernize the industry.
The government has selected the company to produce national
cars with a local content of 60 percent by the end of the third
year of its operation. But it is allowed to import such cars from
South Korea before being able to operate its assembly plant.
Meanwhile Sudradjad Djiwandono, the governor of the central
bank, Bank Indonesia, disclosed several problems threatening
the Indonesian economy, including the uncertainty in the
international economy and tougher competition with the emergence
of several newly-industrialized countries.
"In the short term, we should try to find new export
destinations because our major trading partners like Japan are
facing their own economic problems," he noted.
(alo)