The Indonesian Employers
Association (APINDO) considered that the development of the manufacturing
industry is still difficult to be done intensively in eastern Indonesia because
the businesses faced problems of legal certainty, availability of human
resources, and infrastructure support. Central government policies which tend
to overlapping with local regulation cause investment in the manufacturing
industry in eastern Indonesia still difficult to develop.
Sofyan Wanandi, General Chairman of APINDO, in Jakarta,
on Tuesday (June 24), stated overlapping policies, too many licensing, not to
mention the availability of human resources and unsupportive infrastructures,
eventually cause soaring cost production, thereby inhibiting the development of
the manufacturing industry. According to Sofyan, the problem actually occurs in
all part of Indonesia, it is much more complex due to development imbalances
between the western and the eastern parts of Indonesia.
These conditions also cause multinational companies to
hold in the manufacturing sectors in Eastern Indonesia although the eastern
part of Indonesia has a quite abundant natural resources and raw materials.
Based on data of the central bank, economic growth in eastern Indonesia only
reached 4.6% or lower than the national average which reached 5.2% in the first
quarter of 2014.
Sofyan advised that the local governments in Eastern
Indonesia should build a center of economic growth in each region by optimizing
the natural resource potentials. According to Sofyan, there should be one
region in each province designated as a natural potential-based economic center
to attract investment activities from investors.
In eastern Indonesia, said Sofyan, the development of
economic growth centers could be done trough mining, agriculture and
fisheries-based industries. Meanwhile, the three sectors are the backbone of
the economy of eastern Indonesia as a whole. According to him, the development
of economic growth centers will be an attraction for investors to plan
investment activities appropriately, based on regional potential.
Infrastructure is currently one of the things highlighted
by entrepreneurs in economic development. Without infrastructure support, it is
difficult to hope that national competitiveness would be adequate in facing the
increasingly competitive global competition. The Master Plan for the Acceleration
and Expansion of Indonesia Economic Development (MP3EI) is expected to be the
locomotive of infrastructure development throughout Indonesia in the years
ahead.
The government has also committed to accelerating
regional infrastructure in six economic corridors that could be seen from the
increasing number of infrastructure budget allocation which reached 20%, or a
total of IDR 213 trillion in the short term. In 2013, the government has
allocated IDR 17 trillion to facilitate the preparation of development planning
documents in various regencies/cities. Infrastructure development is a tactical
step to continue to focus on Indonesian economic growth, particularly in the
development of economy in Eastern Indonesia.
He also saw that there are at least four issues that are
considered to be inhibiting the progress of development in Eastern Indonesia.
The four issues are natural resources which are not optimally manage, human
resource quality, lack of infrastructure, as well as institutional system that
needs to be improved. He reminded that Eastern Indonesia requires development
and spur competitiveness.
Another obstacle, according to him, is industrial
development and investment in Eastern Indonesia, due to the provision of land
and infrastructures, such as roads and ports. From the banking sector, access
to capital is still an obstacle for the local businesses. And, the quantity and
quality of transportation infrastructures and energy generation is less
supportive to production efficiency and goods distribution. (E)
Business News - June 27, 2014
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