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)