Minister defends RI's participation in info-tech deal

Minister defends RI's participation in info-tech deal

JAKARTA (JP): Minister of Industry and Trade Tunky Ariwibowo
defended yesterday Indonesia's participation in a pact to
liberalize trade on information technology products as the right
move to protect its interests.

Tunky argued that Indonesia's acceptance of the Information
Technology Agreement (ITA) was part of its efforts to develop the
country's information technology (IT) industry through an
efficiency drive, not protection.

"By cutting tariffs on IT products to zero percent, we hope
that we will see a more competitive environment in the industry,"
Tunky said.

Tunky said Indonesia would benefit from the agreement because
most of the products under its coverage were not yet produced in
Indonesia.

Indonesia, along with 27 other countries -- mostly developed
countries, signed the ITA on the sideline of the World Trade
Organization (WTO) ministerial meeting in Singapore last week.

A number of critics have said Indonesia's acceptance of the
ITA came as a surprise, considering it is believed the country
lags behind in the IT industry.

Even countries like Malaysia and Thailand, which have more
advanced IT industries, did not join the pact.

Thai and Malaysian officials said their countries did not
participate in the ITA because it would not liberalize consumer
products, in which they have a competitive advantage.

Tunky believed Indonesia's and Singapore's participation in
the ITA would not weaken the spirit of the Association of
Southeast Asian Nations (ASEAN), which usually takes a common
stance on various issues in international fora.

ASEAN groups Brunei, Indonesia, Malaysia, the Philippines,
Singapore, Thailand and Vietnam.

Tunky rejected an assumption that by adopting the agreement,
Indonesia would have no chance to build a strong IT industry. "On
the other hand, we would be able to develop the industry in a
competitive environment."

He also denied the accusation that the government had no clear
policy direction to develop the IT industry.

"We do have a concept. If we have not announced it to the
public, it does not mean we do not have one," Tunky said.

Hadi Soesastro of the Center for Strategic and International
Studies said Indonesia could benefit from the ITA as long as it
attracts more foreign investors to produce IT products here.
Otherwise, Indonesia would become a dumping ground for IT
products from developed countries.

The minister said the government would continue to attract
foreign IT producers to relocate their factories to Indonesia to
benefit from the country's expanding domestic market.

"However, we would not promise them any tariff protection.
What we can offer them is our policy and large domestic market,"
he said.

He said that Toshiba Corp. of Japan and LG Electronics of
South Korea had initially asked the government for 30 percent
tariff protection for their TV tubes. The government, he said,
rejected the proposals. Nevertheless, they continued with their
investment plans here.

"It means we can attract IT investors and develop the IT
industry through efficiency, not tariff protection," Tunky
argued.

The minister rejected criticism that Indonesia's acceptance of
the ITA would weaken its bargaining position in future
negotiations on various sectors of the WTO's built-in agenda --
basic telecommunications, financial services and maritime
transport.

Tunky, however, acknowledged that the ITA served as a
precedence in the WTO to achieve sectoral liberalization by a
number of countries only. (rid)