Govt to set guidelines for industries

Urip Hudiono, The Jakarta Post, Jakarta

The government is finalizing a raft of regulations aimed at developing the industrial sector into a tightly knit network of self-supporting sectors, with manufacturers serving as the future backbone of the economy.

State Minister for National Development Planning Paskah Suzetta said a presidential regulation for the so-called "National Industry Development Road Map" is expected to be issued by November, along with related regulations from other ministers.

These will include regulations from the Finance Ministry regarding incentives for certain "technology-intensive, pioneer industries", Paskah said.

He said the government would, under the road map, still have a hand in the development of industries, to ensure maximum economic growth and employment.

"There will be incentives for several industries, and the government is still providing certain guidelines. It will not be left entirely to market mechanisms," Paskah said after a recent meeting on the matter with Coordinating Minister for the Economy Boediono and other related officials.

The road map, based on the government's 2004-2009 mid-term development plan, as well as assessments from both the Industry Ministry and the Indonesian Chamber of Commerce and Industry (Kadin), envisages Indonesia becoming a newly industrialized country by 2024.

This is expected to be achieved through the systematic and comprehensive development of such priority industries as agriculture, transportation, telecommunications and information, as well as certain manufacturing and small-to-medium-sized industries.

Kadin, in its "2030 Vision and 2010 Industry Road Map", proposed four focus manufacturing industries: the electronics, textile, automotive and shipping industries.

A deputy to the coordinating minister for the economy, Edy Putra Irawady, said the road map would also provide several facilities for small industry, mainly concerning the import of raw materials.

"Small industries sometimes cannot afford to import raw materials by themselves, so this must be facilitated through a collective importer... Small industries involved in refurbishing goods also need goods exempted from existing import restrictions."

The National Industry Development Road Map will aim at developing eight industrial regions in the country, based on a "cluster" of related industries making up a supply-chain network among themselves.

Many existing industries lack such a scheme, resulting in inefficiencies, where an industry is located in one area but its supporting industry is in another.

Problems in infrastructure and public services hampering industries are also expected to be resolved through the road map, as it provides better coordination guidelines among government agencies.
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