Robert Go, Jakarta – Indonesia's grand scheme to rev up its economy by revitalising four key industries has been branded unrealistic by businessmen and analysts.
The plan involves a special focus on four selected industries and seeks to develop seven others in a bid to create new jobs, increase exports and revive the country's staggering manufacturing sector. It was presented to the rest of the economic Cabinet two weeks ago by Industry and Trade Minister Rini Soewandi.
The four industries selected for special focus are electronics, textiles, footwear and pulp and paper. Leather, fisheries, crude palm oil, agricultural equipment, food, software, fertilisers and handicraft will receive booster funds.
The money to finance this process will come from the Indonesia Recovery Fund (IRF), a US$200-million privately financed scheme that Ms Rini pitched a few months ago.
Mr Roosmariharso, head of the information department at the Industry and Trade Ministry, told The Straits Times: "We want to provide more jobs and help companies to avoid laying off workers. The four sectors for revitalisation count for more than 50 per cent of our industrial exports. The minister thinks this is the way to go for solving our unemployment problems, and at the same time, boosting exports."
Industry and Trade Ministry lists the creation of around one million jobs between now and 2004 as the main benefit of its new scheme. The blueprint also said Indonesia could realise an additional US$8.6 billion in export revenues each year after 2004.
To observers, however, the idea sounds unrealistic, given the severity of Indonesia's economic and social problems. To begin with, no private investor has given a firm commitment to Ms Rini's IRF plans and as such, the fund has a zero balance at this time.
Mr Roosmariharso admitted as much: "Most of the financing will come from the IRF, but yes, so far there is no money in it. We're still working on getting investors interested."
Mr Raden Pardede of Danareksa Research Institute said: "When you talk about revitalisation, the question is where the money would come from. The government is making optimistic assumptions. There is no room in the state budget for the government to stimulate the economy, and at this point investors won't put in money here because of the lack of reforms."