Lack of standards harm electronics industry: Adhi

Lack of standards harm electronics industry: Adhi

Zakki P. Hakim, The Jakarta Post, Jakarta

A lack of effective regulations governing the standards of
electronic goods in the country is hurting the industry at a time
when ASEAN is set to liberalize the sector by 2007, according to
an industry leader.

The secretary-general of the Indonesian Electronic and
Electrical Appliance Industries Association (Gabel), Adhi
Sukmono, said this situation was primarily the result of
regulations on standards being handled by two ministries: the
Ministry of Industry and Trade, and the Ministry of Energy and
Mineral Resources.

"There has been an argument between the two ministries on who
has more authority in regulating standards on electronic
products," he told The Jakarta Post on Monday.

"This has delayed the standardization of electronics," he
said.

According to Government Decree No. 102/2002 on national
standardization, the Ministry of Energy and Mineral Resources is
authorized to regulate safety standards for electrical
appliances.

However, its authorization is limited to domestic products.

The Ministry of Industry and Trade regulates the standards for
all consumer products, both exported and imported, including
electronic goods.

Adhi said the absence of government standards contributed to
the massive inflow of cheaper imported electronic goods, hurting
locally made products.

"Deindustrialization is happening," he said, referring to the
closing down of some electronics manufacturers.

He said that when the government imposed standardization on
electric fans in June of this year (the first time a standard was
imposed on electronic goods in the country), it was deemed too
late as only four domestic manufacturers had managed to survive
the fierce competition with cheaper imported products (whether
legally or illegally imported), particularly from China. The four
were Maspion, Panasonic, Cosmos and Sekai.

The association claims that 50 percent of the electronic
products traded in Indonesia are illegally brought into the
country.

Adhi predicted that with the member countries of the
Association of Southeast Asian Nations (ASEAN) planning to
liberalize tariffs in the electronics sector in 2007, the local
industry would face more difficulties as the government would be
unable to control the influx of imported electronics without
effective standards.

He suggested the government end the regulatory dualism on
standardization.

According to Adhi, most ASEAN countries have already set up a
single standardization authority, such as the Standards,
Productivity and Innovation Board in Singapore, the Standards and
Industrial Research Institute of Malaysia and the Thai Industrial
Standards Institute.

Currently, Indonesia's exports of electronic products stand at
about US$7 billion per year, the lowest among ASEAN countries.
Thailand, for example, exports some $23 billion worth of
electronic goods per year.