Red tape blamed for slow growth in fishery sector
Red tape blamed for slow growth in fishery sector
JAKARTA (JP): An economic analyst has blamed the slow
development of the fishery sector on the numerous and lengthy
procedures needed to gain operating licenses.
Didik J. Rachbini, director of the Institute for Development
of Economics and Finance, said that corruption is still rampant
across the country because the government's deregulation measures
have not been followed up with a simplification of the
bureaucracy.
"This has caused a lot of trouble," he told The Jakarta Post
here over the weekend.
In the fishery sector alone, he calculated that a prospective
investor needed to obtain 39 licenses before being able to begin
operations.
"If one license takes 20 days to be issued, then 39 licenses
would take 780 days, or more than two years to be completed," he
said.
Apart from this, he said, the sector also faces the problem of
high interest rates -- currently approaching about 20 percent per
annum -- which make it difficult for investors to attain profits.
He acknowledged that fisheries might be considered by banks as
high-risk businesses, making them reluctant to provide loans, but
pointed out that the risk factor was present in other sectors as
well.
"Banks should not use this as an excuse for not providing
loans ... This is the important agro-industrial sector, which we
want to promote for development," Didik said.
He pointed out that the situation is particularly bleak for
fisheries, because the sector has great potentials which have yet
to be explored.
In the last two years, he said, the value of fishery exports
increased from US$1.6 billion in 1994 to $1.8 billion in 1995.
"This increase can be considered quite rapid. Yet if we
consider the unexploited potential yield of the sector, there is
still a lot we can do," he said.
According to the Directorate General of Fisheries, fishery
production -- both from seawater and freshwater sources -- in
1995 reached 4.22 million tons, up from 4.02 million tons in
1994. Export volumes during those years were 554,330 tons and
520,570 tons, respectively.
Meanwhile, studies have shown that the potential yield of the
fishery sector from Indonesia's territorial waters alone
presently ranges between six million and seven million tons.
Didik said that export value could still be increased to reach
US$4 million and help cover the decline in exports of other
commodities, such as forestry and certain industrial products.
He said that the lack of sound fishing technology and
equipment is the main cause of Indonesia's lag in the sector.
"The sector still relies on traditional fishermen who use
conventional equipment. They don't travel out further than 60
miles from the shore. There are only a few large cold storage and
packaging companies in the country," he said.
He said that if the government was willing to cut back red
tape and high interest rates for the agribusiness sector, the
investment climate for the fishery sector would then become more
attractive to potential investors.(pwn)