RI NEEDS TO DEVELOP ALTERNATIVE INDUSTRIES : OBSERVER

Jakarta, Feb 2 (ANTARA) - Economic observer Tony Prasetiantono said it was time for Indonesia to develop alternative industries that could reverse the decline in exports caused by current world financial crisis.
"We in the future must have a broader economic base. We must not rely on just mining or plantation products in our exports," he said here Monday.
He said Indonesia must start diversifying the sectors which were considered potential to be developed such as the creative industry sector.
The most important thing was Indonesia must never give up and remain optimistic in the current unconducive global economic situation, moreover following national export decline as a result of weaker demand from a number of potential export markets.
"Never become hopeless because we will not be like now in the future. We must not be discouraged in developing new enterpreneurs because when we talk about exports we do not only talk about 2009 but also long-term goals," he said.
He said exports would also continue until years ahead meaning Indonesia must not lose a momentum when the world economy was recovering because its export markets were taken over by its competitors.
According to him the drop in the country's exports in 2009 was caused by slumping demand from a number of potential export markets such as the US, China and Japan.
The three countries, he said, were experiencing a negative growth so it was normal if they cut their export demand from Indonesia. "Automatically our exports will drop including those to China which is just seeing its economic growth sliding drastically for the past four years to only around 6.8 percent from a double-digit before," he said.
The condition will certainly reduce the market's capacity to absorb export products from Indonesia, he said.
Tony said that actually not only Indonesia but other exporting countries as well suffered from the weakening demand because almost all countries in the world were affected by the current financial crisis that caused negative growth.
He said the drop in the country's exports would certainly reduce the country's capacity to increase its foreign exchange reserves. "With exports dropping, automatically the country's capacity to increase its foreign exchange reserves is weakening or the country's foreign exchange reserves are not increasing like before. The country's foreign exchange reserve growth is potentially withheld this year," he said.
He said the foreign exchange reserve that did not grow would certainly affect other sectors including the real sector following the continuing drop of the rupiah exchange rate now already standing at around Rp11,000 against the US dollar.
The drop in the rupiah exchange rate is caused by among others the weakening exports that affected directly the real sector including absorption of manpower in export-based companies, he said.
"Demand for workforce for export-based products will obvioulsy decline and even some companies have already laid off their workers," he said.
In view of that, he said diversification of industries was urgently needed with regard to finding alternative business opportunities to avoid dependency on certain sectors.