Saturday, October 28, 2006

Indonesia Country Report

The Indonesian government is moving away from a centralized system of decision-making in favor of decision-making at the regional level.

The construction industry has played an important role in terms of the economic, social and cultural development of Indonesia, but has declined significantly as a percentage of the national GDP following the Asian currency crisis began in 1997. Employment by the construction sector has also dropped following the Asian currency crisis.

The Indonesian government has taken several steps to revitalize the construction industry. The government enacted Construction Service Law No. 18 in 1999 and Government Procurement Policy No. 80 in 2003 in an attempt to increase the competitiveness of the Indonesian construction industry both domestically and abroad. The Indonesian government also created the Construction Service Development Board (CSDB) in order to boost competitiveness in the construction sector, taking its cue from CIDB Malaysia. The CSDB conducts research, provides skills training, and regulates licensing within the construction industry. It also provides protection for workers in the construction industry and for foreign construction firms.

The Indonesian construction industry continues to suffer from a shortage of capital and skilled workers. In addition, foreign-owned firms control the Indonesian construction market. In spite of these obstacles, several Indonesian firms have successfully bid on road and hotel projects in ASEAN member nations. Indonesian firms are also involved in developing new construction technology.

Many Indonesian construction firms are faced with a significant gap in capital funds and technology when compared with foreign-owned construction firms. However, domestic construction firms are actively looking for opportunities to collaborate with foreign business partners in order to better position themselves for the future.

Indonesia holds great potential as a construction market. The regions of Sumatra, Kalimantan, Sulawesi, and Papua have been identified as prime targets for future construction investment due to a lack of existing infrastructure. In 2003, the potential market for construction in Indonesia was estimated at 156 trillion rupiah.

The Indonesian government is interested in promoting harmonization of construction skills throughout Asia and Australia. Furthermore, it is actively seeking to collaborate on exchange projects with construction service companies and professional associations. Other areas of focus include joint training programs and apprenticeships with foreign construction service companies and industry organizations. (Summary, 9th Asia Construct)

1 comment:

Value4 said...

Great post.information you have shared,i really appreciate with that
Construction Companies in Australia