Industrial sector still faces many problems

Industrial sector still faces many problems

JAKARTA (JP): Indonesia's industrial sector still faces many
problems despite its rapid growth over the last few years, an
academic said yesterday.

Center for Information and Development Studies' researcher,
Didin S. Damanhuri, said if the problems were not resolved now,
new and more complicated ones would emerge.

Didin is also the director of the Bogor Agricultural
University's information resources agency.

"There are at least six problems the country's industrial
sector still faces," he was quoted by Antara as saying.

These problems include the concentration of the economy in the
hands of a few people and the many monopolies.

Didin said the other problems were economic domination by a
group of rent-seekers, the weak relationship between companies
within an industry and the small number of middle-level
industries which caused weak industrial structures.

He said state companies were also unable to supply industries
with raw and semi-processed materials and failed to encourage the
use of technology.

Another problem was that foreign investors chose to do
business in Indonesia because of its huge domestic market and not
as an export base.

Didin said deregulation over the past decade had not changed
Indonesia's industrial structure.

"The added value enjoyed by industries has not managed to
affect small and medium industries. So far it can only be enjoyed
by big industries," he said.

Didin was confident Indonesia's big industries, with their
huge capital, advanced technology and wide market access, were
prepared to compete in the free market era.

"Although there are signs that the industrial sector is
currently not efficient and professional enough, it won't be too
difficult for them to adapt to the rules of a free market," he
said.

But small and medium businesses, home industries and
agriculture-based industries would have a tough time entering the
free market era, he said.

He said special attention should be given to small and medium
business because their problems often had "unexpected economic
and political implications" because they operated close to the
grass roots level. (pwn)