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.