RI, UNIDO sign assistance agreement
Zakki P. Hakim, The Jakarta Post, Jakarta
Indonesia has signed a technical assistance program with the United Nations Industrial Development Organization (UNIDO) to improve its industrial efficiency, boost employment and protect the environment, said a minister.
The deal, called Country Service Framework (CSF) II, includes a fund mobilization in a three-year program of up to US$10.51 million from donors, Minister of Industry Andung A. Nitimihardja said on Wednesday.
"The fund is aimed at developing our small and medium enterprises, environmentally friendly industries and the reconstruction of Aceh," Andung said on the sidelines of a hearing with House of Representatives Commission VI on trade and industry.
UNIDO's director general Carlos Magarinos and Andung signed the program last week during the latter's visit to Vienna.
UNIDO, a UN agency tasked with speeding up the industrialization process in developing countries, and the government have agreed to undergo 14 technical assistance projects that would need about $10.51 million in funding for 2005-2007.
The program was a follow-up from the previous CSF I program, of which some $2.5 million worth of projects have been implemented, according to the CSF II document, made available to The Jakarta Post recently.
Under the CSF II, the programs would focus first on supporting the growth of the private sector and SMEs, then supporting energy efficiency and environmentally sustainable industrial development.
Third, it would support the recovery and rehabilitation of communities in the tsunami-affected areas and post-conflict areas.
On top of the list, is a program called the industrial framework formulation with respect to competitiveness, trade facilitation and environmental impact, with a budget of about $200,000.
The ministry's director general for transportation equipment and telematics industries Budhi Darmadhi, who accompanied Andung to Vienna, said that the formulation program would not put aside the government's five-year strategic industrial plan, which also addresses similar issues.
"The (CSF) program would be like fine-tuning our plan," he told the Post, responding to the question whether the UN agency doubted the effectiveness of the ministry's strategic plan.
The strategic plan is a road map, or guideline, as to what the country's industrial sector is trying to accomplish in the next five years.
According to the document, the major structural weaknesses in the Indonesian industry which inhibit industrial competitiveness include a narrow export product base and market, high imported inputs, lack of technological know-how and low productivity.
The deindustrialization was reflected in the realization of installed capacity of the manufacturing sector, which stood at 60 percent in 2002, down from pre-crisis level of 80 percent, it added.