Contractors to be required to use local products

Adianto P. Simamora, The Jakarta Post, Jakarta

The Ministry of Industry and Trade will issue a decree requiring all contractors on government projects to use locally made products.

The move is part of the effort to help the country's manufacturers, which have been hurt by a flood of cheaper imported products in the domestic market.

Gunaryo, a director at the ministry, said on Friday an interdepartmental team was now identifying which local products and services would be included in the decree.

"Our priority now is to boost the use of locally made products at home," he said.

Gunaryo said the decree would buy time for local manufacturers to improve their quality, making them more competitive both at home and in the international market.

"We want to help local producers so they can keep their businesses alive," he said after opening a trade expo here.

The expo, organized by PT Panorama Convex, features products and services related to the renovation of homes, offices and buildings.

Many contractors on government projects use less expensive imported products to help increase their profits.

"If the current situation remains unchanged, our country will only be a market for overseas products," Gunaryo said.

Local producers have long complained of the high-cost economy here, leaving them unable to compete against imported products.

The ministry also has issued a decree on the supervision of both imported and locally made products sold in local markets.

Under this decree, producers and traders must meet government regulations on labeling, marketing, advertising and after-sales service.