Development plan short on details

Development plan short on details

Zakki P. Hakim, The Jakarta Post, Jakarta

The newly unveiled government five-year development plan raises
more questions than answers, notably in the manufacturing sector,
as not only does it contain targets that are ambitious, it is
also lacking in steps to move from basic into more sophisticated
manufacturing process.

Drawn up by the National Development Planning Agency
(Bappenas), the program -- called the Mid-term Development Plan
(RPJM) 2004-2009 -- targets an average growth of 8.56 percent for
the manufacturing sector during that period to help the economy
expand by 6.6 percent per annum.

However, questions have already arisen as to how the targets
could be achieved, considering the manufacturing sector in the
country had been growing at around 5 percent since the financial
crisis in the late 1990s.

The program was absent in explaining government plan to
gradually move from basic manufacturing products such as textile
and footwear into an industry that needs higher human resources
skill and technology such as semiconducter and computers, one
legislator said.

As economist-turned-legislator Zulkieflimansyah puts it this
way, "It is pointless now to have such a high growth if we keep
manufacturing or producing the same products over and over again,
say 10 years from now."

Under the five-year plan, the government would focus on 10
priority industry clusters. They are in food and beverages,
seafood and maritime products, textiles and clothing, footwear,
palm oil, wood products, rubber and rubber products, pulp and
paper, electrical machinery and appliances and petrochemical
products.

The sectors were chosen based on their ability to absorb
workers, meet basic domestic needs such as food and medicine,
develop and process agricultural and maritime products as well as
other natural-based resource materials, and on their export
potential.

A document containing more detailed steps and sectors has also
been issued by the Ministry of Industry to support the medium-
term program.

Still, Zulkiefli questioned the government's steps to emerge
from the trap of industrial stagnation which the country
currently faces.

"Our top manufacturing products today are the same as what we
had back in the 1970s," said Zulkiefli, a United Kingdom-trained
economist specializing in industrial policy.

He pointed at South Korea as an example.

The nation had similar top products in 1970s, but after a 30-
year process of industrialization, it has now emerged as a giant
producer for semiconductors, computers, automobiles,
petrochemicals, communication gadgets, ships, steel plates,
medical equipment, synthetic fibers and electronics parts.

"It is relatively the same with Malaysia and Thailand too.
Indonesia has never had an explicitly articulated blueprint,
unlike the ones created by South Korea decades ago or Malaysia
and Thailand years ago," he added.

"Still, the Ministry of Industry must be credited for
producing a detailed policy in a timely fashion. However, it
lacks explanation on things such as technological transfer and
the process of industrialization," said Zulkiefli, a member of
the House of Representatives Commission VI overseeing industry,
trade, investment, small and medium enterprises and state-owned
firms.

Rachmat Gobel, Indonesian Chamber of Commerce and Industry
(Kadin) vice chairman for industry, technology and maritime
affairs, also said it would be unlikely the government could
reach the target this year.

"Maybe next year, but only after the government had dealt with
numerous problems discouraging the private sector at the moment,"
he said.

Nevertheless, he said that policy was at least on the right
track, but the private sector, in the shorter term, would prefer
to see improvement in issues such as rampant smuggling, taxation,
labor laws and lack of infrastructure.