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.