Diamonds not Indonesia's best friend, yet at least

Diamonds not Indonesia's best friend, yet at least

The Jakarta Post, Jakarta

"There are three things extremely hard: steel, diamond, and to
know one's self," scientist and statesman Benjamin Franklin once
said.

Apparently the same applies to Indonesia, which seemingly
finds it difficult to understand that it is capable of
benefitting enormously from its rich resources in precious metals
and stones.

"We have abundant resources of gold, silver, pearls, diamonds
and other gemstones, but our jewelry industry and exports are
still very limited," Minister of Industry Andung A. Nitimihardja
said.

He said that the Indonesia's jewelry exports were still very
low compared to the country's abundant resources, and to date
made up only about 0.5 percent of the country's total exports of
US$20.9 billion.

Indonesia's jewelry exports were also low compared to
neighboring countries such as Thailand, a country with relatively
limited resources of precious metals and gems, he added.

He said that Indonesia exported $125.36 million worth of
jewelry through 10 exporters last year -- less than 10 percent of
the $1.3 billion earned by Thailand through 350 companies.

"We have to learn harder and cooperate with overseas jewelry
producers," he said.

According to Andung, the local industry had to overcome
several critical weaknesses, such as inability to create new and
innovative designs and lack of mastery precious metal and gem
cutting technology, as well as other technical problems.

Still, he was optimistic that Indonesia's cultural diversity
would eventually contribute to the creation of new and original
designs, provided that the industry could master the necessary
technology so as to meet market demand.

Currently, Indonesia exports jewelry to the United States,
European Union, Middle East, Japan, South Korea, Hong Kong,
Taiwan, Singapore and Malaysia.

Although the value of exports is still low, it grew 15.74
percent from $75.48 million in 2002 to $87.36 million in 2003 --
the latest year for which figures are available.

To help promote the industry, the ministry would focus on
developing a jewelry manufacturing center in Surabaya, East Java,
establishing training and development center in Semarang, Central
Java, and setting up a training center for cutting gemstones in
Bandung, West Java.

This was in line with the ministry's decision to include the
industry among 32 priority sectors in the National Manufacturing
Sector Development Policy.

The policy document says that in the long term (2010-2025),
jewelry exports will be boosted so as to bring them close to the
Thai level. It is expected that this will be achieved mostly
through capacity-building processes, such as mastering processing
techniques and building a strong local brand image on the
international market.

On a wider scale, the government is working to develop the
sector through the "cluster approach" -- where the industry is
closely connected to supporting industries, such as raw material,
machinery and equipment producers, as well as related industries
like fashion, stationery, watchmaking, jewelry and souvenirs.

To further boost the industry, the ministry also proposes to
provide fiscal incentives.

In the next five years, the national policy is expected to
help the country's industrial sector grow by 8.6 percent per
annum on average so as to support the economy expand at a rate of
6.6 percent annually.

Although Indonesia now appears to know what to do with the
sector, getting it done will probably still be as hard as cutting
a diamond.