Indonesia banking on agroindustry: Luhut
JAKARTA (JP): The agroindustry sector, having shown its resilience during the economic crisis, will play a key role in Indonesia's economic development in the coming years, Minister of Industry and Trade Luhut Binsar Pandjaitan said on Monday.
The government's middle to long term economic strategy calls for maximizing the use of natural resources, especially in the agroindustry sector, Luhut said in his speech opening the International Agro Expo 2000 at the Manggala Wanabakti building.
The short-term strategy calls for increasing nonoil/gas exports, developing small and medium enterprises and increasing production, he said in the speech which was read by Djumarman, the secretary of the director general for chemical, agriculture and forestry based industries.
The economic crisis changed the orientation of the economy. It has subsequently become more people-oriented and no longer focuses as much on large industries," Luhut said.
Small and medium enterprises -- which have contributed 13.3 percent to Indonesia's gross domestic product -- proved to be far more resilient during the crisis than big businesses, he said.
Small and medium enterprises which are geared for exports and use local raw materials have grown even faster than they did before the 1997 crisis, he added.
The ministry will continue to focus on the development of agro-based industries aimed at making Indonesia an exporter of processed food as well as an exporter and producer of primary agricultural products.
"This means farmers or village cooperatives will have to be capable of doing off-farm activities," Luhut said, adding that these activities would need support in the processing and marketing sectors.
Luhut pointed out that the agroindustry sector brought in $2.5 billion in foreign exchange last year, up from $1.6 billion in 1995.
Indonesia's major agroindustry exports include palm oil, coconut oil, processed cocoa, margarine, canned fish and cigarettes.
The sector attracted Rp 34.08 trillion ($4 billion) worth of new investments last year compared to Rp 22.75 trillion in 1995.
The number of agro-based companies increased in 1999 to 2,309 from 2,058 in 1995, and the number of workers in the industry rose to 735,392 people in 1999 from 678,748 people in 1995.
The minister did not give the figures for 1997 when the economic crisis first hit Indonesia.
Some 60 companies and institutions, or half the number expected by the organizers, are taking part in the Agro Expo 2000 which will end on Friday.
Wisnu M. Soedjowo, the deputy chief organizer, blamed the recent situation in Jakarta and the weakening of the rupiah for the low turn out.
The participants include representatives from the North Maluku and North Sumatra administrations, from Thailand, Sudan, Britain, South Africa and Hungary.
Major corporate companies include state-owned fertilizer maker PT Pupuk Kalimantan Timur and publicly listed poultry firm Sierad Produce.
Products being exhibited include teakwood seedlings, cereals, tractors, chemical sprayers, fertilizers and processed food products like chicken nuggets and hibiscus tea. (10)