Local electronic goods no longer competitive

Local electronic goods no longer competitive

JAKARTA (JP): Indonesia's electronics industry, which is dependent largely on imported components, will no longer be competitive in the international market by the year 2000, an industry executive predicted yesterday.

"I am afraid our electronics products will no longer be competitive on the world market if we do not develop an efficient component industry in this country," Uripto Widjaya, chairman of the Indonesian Electronic Industry Association, told the group's national meeting.

He said that the prices of imported components are strongly influenced by global financial conditions. The appreciation of the Japanese yen against the U.S. dollar, for example, has raised the prices of components imported from Japan.

"Our labor costs, which continue to rise, will also affect our competitive edge," he noted.

Currently, Indonesia imports some 30 percent of its electronic components from Japan and the remainder from Thailand, Taiwan and Malaysia, where most component manufacturers are also Japanese and U.S. companies.

Indonesia expects the electronics industry to become one of its largest earners of foreign exchange in the next few years.

According to the Ministry of Industry and Trade, Indonesia's exports of electronic goods last year reached US$2.9 billion. The government projects exports to reach US$6 million in 1999, the last year of the Sixth Five Year Development Plan.

"We need to speed up the development of the component industry here," Uripto said.

Indonesian electronic goods exports consist mainly of TV receivers, radio cassette recorders, video cassette recorders, and car audio equipment.

Uripto said that, to encourage the development of the industry, Indonesia should speed up the establishment of a bonded zone specially for the electronics industry.

"I hope the Minister of Industry and Trade will soon decide on the site of the planned bonded zone," he noted. (13)