Kadin unveils road map to industrial growth

Andi Haswidi, The Jakarta Post, Jakarta

In an effort to provide markers for the revitalization of industry, the Indonesian Chamber of Commerce and Industry (Kadin) has unveiled its vision and road map for the next 25 years.

"By 2030, we should have become a nation with advanced industry and a strong commercial sector through improved investment and competitiveness," Kadin chairman Muhammad Hidayat said during a visit Wednesday to The Jakarta Post.

After the crisis, Hidayat said that Indonesia had endured a series of leadership changes, with none of the leaders offering a clear development vision, especially as regards how to make the industrial sector the main locomotive of the economy.

"This vision and industry road map are the product of nine months of research by our economics team, together with more than 100 business associations grouped under Kadin. We are going to soon present it to the President as recommendations," Hidayat explained.

Faisal Basri, the head of Kadin's economics team, said that the business chamber had identified ten business sectors as having the potential to drive industrial development.

The most important thing was to achieve steady economic growth of more than 7 percent beyond 2010 so as to improve investment attractiveness and global competitiveness, boost job creation and reduce poverty.

Of the ten sectors, four -- the textile and shoe, electronics, automotive and shipping sectors -- were identified as priorities by the road map so that the economy could grow at above 7 percent.

"The textile industry is often deemed to be a sunset industry, which is untrue. The only thing that has reached its sunset in this industry is the machinery.

"The industry itself contributed net exports of US$7 billion in 2005 as a result of strong demand and branding," Faisal said.

"We want the 10 sectors to support each other. Take the case of the petrochemical industry and the fertilizer industry; they are cutting each other's throats due to a lack of gas, despite the fact that both are controlled by the state. It would be wonderful if they could create synergies," Faisal said.

In the road map, Kadin wants to see six concrete and strategic steps being taken by the government to help rebuild the country's industrial foundations.

The steps include fiscal incentives to increase investment and competition; financial support for the aquaculture industry; prioritizing of agricultural product development; legal support for the plantation sector; and strengthening bilateral trade relations.

John Prasetyo, Kadin vice chairman for international economic cooperation, said that the vision and road map could serve as a framework for the government in formulating more detailed approaches and policies.

"There is a saying that to have a vision is to be able to forget the past and innovate anew, a process that is also referred to as creative destruction. The question is whether this nation is ready for a new vision?" John said.

I-Box

Industries expected to ramp up economic growth to above 7 percent

Textile and textile products, shoes and sandals

Electronics and components

Automotive and components

Shipping

Industries expected to improve investment and competitiveness

Infrastructure development

Capital goods and machinery

Petrochemicals and fertilizers

Industries expected to contribute to poverty alleviation

Aquaculture

Agriculture, livestock husbandry, forestry, plantations,

farming, food processing

Cultural products