Habibie denies charges of promoting closed economy

Habibie denies charges of promoting closed economy

JAKARTA (JP): State Minister of Research and Technology B.J.
Habibie denied yesterday that he is trying to shift Indonesia's
current open economy to a closed one by forbidding the
importation of second-hand fishing vessels.

"Look at Japan. Is Japan's economy really open? We have to be
realistic. In this case, we are doing this (forbidding imports of
used fishing vessels) because we are thinking of our
descendants," Habibie said after witnessing the signing of a
joint venture agreement on the production of railway locomotives.

Habibie called on the people to buy local products, including
the products of strategic industries, to help finance the
research and development costs of domestic strategic industries.
He said this is important because research and development are
fundamental to the development of high-tech industries.

"If you buy foreign products, it means you help make those
products superior to local products," Habibie said.

The minister said that a number of products of Indonesia's
strategic industries, especially Palindo Jaya ships and Argo
Bromo and Argo Gede railway wagons, could not yet be categorized
as globally superior products, like the N-250 aircraft, which has
received international applause since its maiden flight in
August.

To make locally-built sea vessels globally superior, Habibie
said, sacrifices need to be made in the form of a ban on the
importation of used vessels from abroad.

Habibie argued that producing strategic products locally is
necessary, especially in order to conserve the country's foreign
exchange reserves and to master high technology.

He said the trade imbalance between Japan and the United
States, which benefits Japan, is partly a result of the attitude
of the Japanese people, which prefer domestic products to foreign
products.

"Japan cares about making its products into globally superior
products because it has limited natural resources. The United
States does not care about that because it has abundant natural
resources, as does Indonesia," Habibie said.

As the era of global free trade gets closer, Habibie said
Indonesia has to pursue industries with competitive advantages,
rather than those with comparative advantages.

He said industries with competitive advantages cannot be
easily relocated to other countries, as could industries in which
Indonesia has comparative advantages, such as textiles and
footware.

Yesterday's agreement, Habibie said, serves as a good vehicle
for achieving competitive advantages in the railway industry.

Under the agreement, the joint venture company PT GE Lokomotif
Indonesia will be established with an initial paid-up capital of
US$8 million, of which 35 percent will be provided by state-owned
railway equipment manufacturer PT Inka, 32.5 percent by PT GE
Technology Indonesia and another 32.5 percent by the General
Electric Company of the United States.

The venture, which will have an annual production capacity of
24 locomotives, has already secured a contract to build 15
locomotives for the state-owned railway company Perumka. The
company also plans to sell a portion of its products abroad.

Habibie said he welcomes the participation of any private
company, either foreign or domestic, which wants to assume
responsibility, currently shouldered by the state-run strategic
industries, for producing strategic products.

"As long as they are incorporated in Indonesia, I don't care
who owns them. The most important thing is that they can
contribute something to the country," Habibie said. (rid)