RI Needs To Diversify Driving Motors For Economic: President

Jakarta, Aug 16 (Antara) - President Susilo Bambang Yudhoyono said on Friday Indonesia needs to diversify the sources of its economic growth. Indonesia must not rely only on abundant natural resources and cheap unskilled labor to drive economic growth, Yudhoyono said when unveiling the country`s draft state budget for 2014 and financial note in a plenary session of the House of Representatives here. "We must not let ourselves caught in middle income trap," he said. He said global economic turbulence and sharp fluctuation of commodity prices necessitate diversification of the driving motors for the country`s economic growth. He said the country must learn from history, citing a number of countries have been caught in middle income trap, failing to proceed the progress to become an industrialized country as they relied only on natural resources and cheap unskilled labor. "We must not get bogged down. For that purpose, the government has taken steps to encourage innovation and develop technology and improve the quality of our human resources," he said. The government has started by abolishing value added tax on imports of non fiction books for the advancement of education in the country, he cited. In addition, the government has offered tax incentives to boost research and development, he said. "These are important early steps toward diversifying sources of Indonesia`s economic growth in the future to be not relying only on natural resources and cheap unskilled labor," he said.