JAKARTA, Feb 25: Indonesia’s trade ministry has drawn up a plan to revitalize four key industries and develop seven others in an attempt to counter rising unemployment and raise exports, an ministry official said on Monday.
The industries — textiles, electronics, footwear and pulp and paper — need to be rejuvenated because they can absorb many workers and provide export revenues, said Roosmariharso, a spokesman for the ministry.
The blueprint also proposes the development of seven other sectors — leather, fishing, crude palm oil, fertiliser and agricultural equipment, food, computer software, and handicrafts and jewellery. It was presented at a cabinet meeting on February 14.
The development of the 11 sectors would absorb an estimated 1.15 million workers and raise annual exports from 29.8 billion dollars to 40.197 billion dollars in 2004, Roosmariharso told AFP.
It would also prevent about 100,000 layoffs in the pulp and paper sector. The ministry says the textile industry now employs some 1.19 million workers while 250,000 people work in the electronics sector.
Indonesia’s unemployment and underemployment figure is estimated at 42 million people, or 40 per cent of the country’s workforce. The 1997-1998 regional economic crisis forced many companies to lay off their workers or even cease operations.
Roosmariharso said a myriad of problems were hampering efforts to revive industry.
“These include the security situation, labour disputes, dependence on imported raw materials and a high-cost economy caused by inefficiency and corruption,” said Roosmariharso.
The new autonomy law also hampers development as regional governments imposed various levies on business people investing in their regions, he said.
To finance the revitalisation project the ministry has proposed establishing a body to be called the Indonesian Recovery Fund (IRF) Asset Management to restructure debts owned by the industries.
It is also planning to set up another agency called IRF Venture Capital to finance expansion.
Many companies have been forced to pledge much of their assets to the Indonesian Bank Restructuring Agency to cover huge debts.
Under the ministry’s proposal the debts would be transferred from IBRA to IRF Asset Management, which would restructure the debts.
Trade Minister Rini Suwandi has said Indonesian industry had been unable to compete with foreign companies partly because of a lack of modern equipment and debt problems.
She said 70 per cent of goods in the domestic market were imported and 70 per cent those imports were smuggled into the country.—AFP
