From The Jakarta Post

Improve competitiveness or risk missing the boat: President

Tony Hotland, The Jakarta Post, Phnom Penh

Amid an increasing trend toward the relocation of labor-intensive industries, Indonesia must strive to consistently improve its competitiveness so as not to lose out to fast-growing neighbors, such as Vietnam and Cambodia, President Susilo Bambang Yudhoyono has said.

Speaking after meeting with representatives of the Indonesian community in Cambodia during his state visit here, Yudhoyono said Wednesday that the government was paying serious attention to the trend and was preparing itself for increased competition from its competitors in the region.

In the oil and gas sector, he said, the government was exploring the possibility of encouraging firms from gas-importing countries to relocate to Indonesia following expected cuts in gas exports amid increased domestic consumption.

"For example, most of our gas is exported. But due to the economic situation, we are having to cut back on exports and allocate more gas for our domestic requirements, particularly for electricity generation. We now realize that our electricity industry must make good use of gas for power generation as it is cheaper than oil. If electricity is cheaper, goods will be cheaper as well. We also need more gas for our fertilizer industry.

"If buyers like China, Japan, Taiwan and others see their gas supplies from Indonesia threatened after their contracts expire in 2009 or 2010, we could investigate the possibility of a new arrangement under which they relocate their gas-dependent industries to Indonesia. This would give rise to new employment opportunities, we would raise more in taxes, we would benefit from greater exports and our gas would be used to benefit ourselves," Yudhoyono said.

The President also said that it was essential to improve the competitiveness of Indonesian workers. To this end, the government would overhaul the vocational training system so as to ensure the availability of workers with the skills and knowledge needed by the economy.

He also encouraged Indonesians to learn English as one of the factors that reduced the competitiveness of Indonesian workers was their lack of English-language skills.

"We must look at English as the international language, not a foreign language, if we don't want to lose out to the Philippines and India.

"I want us to preserve our national language and our local ones, but we must also be able to speak the international language," he stressed.
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