THE CONDITION OF SOUTHERN INDIA AND ITS RELATION WITH INDONESIA :
SOME POINTS FORWARD
I.
The Consulate General of Indonesia in Mumbai, India
The Consulate of the Republic of Indonesia in Mumbai opened in January
1951. The office covers 7 states that fall under its accreditation which are:
Maharashtra, Gujarat, Goa, Kerala, Tamil Nadu, Karnataka and Andhra Pradesh.
Its presence is important owing to the fact that these states which are situated
in the Southern and Western part of India considered to be the centres of Indian
economy and Bombay (Mumbai - Maharashtra) being the dominant one.
After five decades since its inception, Indonesian Consulate in Mumbai has
become one of the surplus missions of Indonesia’s abroad in terms of revenues
it receives from visa. For the purpose of comparing data, tangible revenues from
visa and other consular fees last year was US$363,492. This figure has
surpassed the office’s operational outlay for the same year. This is not including
intangible revenues resulted from non-oil and gas export. Moreover, several
Indonesian companies or foreign companies operating in Indonesia have started
to bag some projects in the oil industry and other related-works such as
maintenance within Western region.
A positive trend of trade and human flow between the two countries has
shown an increase over the years. This, however, has much or less related to
the state visit of Her Excellency Mdm Megawati Soekarnoputri to India (New
Delhi, Hyderabad and Mumbai on 1-4 April 2002).
A. The Potentials of Southern India
A.1. Economy
The Southern part of India is the centre of industry and economy of the
country. Apart from the fact that this area is relatively fertile compared
to the rest of India, it is also considered more developed with many
centres of industries. Over the last decade, Southern India has turned
up with scores of progress in the fields of industry especially information
technology (IT) and biotechnology that claims world recognition.
Companies like Tata Technologies, Wipro and Infosys which have
centers in South India have been able to function as the back office of
many world companies. The IT sector itself has been able to grab
outsourcing opportunities offered by the globalisation process in the
developed economies where the latter could just focus on core business.
This absorbs many IT specialists or non-IT specialists with a mere
English plus computer literacy. It is clear that a focused educational
system and many technical schools being set up in India have created
the IT workforce.
The success story of IT sector in South India has created a lot of young
people to become real middle to upper class in India and the world.
Azim Premji of Wipro with the net asset of US$8.9 billion last year
became the richest man in India while Narayana Murthy of Infosys for
this year become the fourth richest man in India with the net asset
accumulated to US$3.8 billion.
Condition of Southern India and its relation with Indonesia:
Some points forward
1
For Indonesia itself, the surge of this middle class number is seen to be
an opportunity to boost the number of foreign tourists coming to
Indonesia. This new middle class people surely need holiday. Although
the flow of Indian tourists coming to Indonesia accounted only for small
fractions but the trend has been one of the most stable foreign tourists
arrivals to Indonesia.
Tabel: Number of Tourists Coming to Indonesia
Country of Residence wise (1997-2001)
The IT industry is followed by the same success in the pharmaceutical
industry with a very high competitive advantage in the medicine
products compare to the same from other countries in terms of price.
Indian drug manufacturers are able to produce medicines with a very
best price far lower than the price offered by their competitors from
other countries. Several factors have been noticed accounted for this:
availability of raw materials, technology to process the medicines has
Condition of Southern India and its relation with Indonesia:
Some points forward
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matured which has been supported by strong R&D and comparatively
loose policy in this sector.
Rs. 1 Crore = 10 juta. US$1 = ±Rs.46,5 – 47.0
If we look at the index of Revealed Competitive Advantage (RCA) below,
Indian produced medicines are far more competitive than the same from
Indonesia.
A.2.
Socio-culture
In the social front, for the last several years this region of South India
has shown an incredible progress in terms of human resources and
technology. Being aware of the clear correlation between the standard
Condition of Southern India and its relation with Indonesia:
Some points forward
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of education and the country’s competitiveness vis a vis other countries,
a focus has been in the forefront of India Government.
We noticed that there have been many progress in the field of high
technology created by new research in IT and computer, biotechnology,
pharmacy and healthcare, chemistry, physics and nano technology,
nuclear, automotive, agriculture and airspace. For Indonesia itself,
excellent educational and governmental institutions driving the India’s
advancement in technology could become partners especially in IT and
biotechnology.
B. Trade and Investment between Indonesia-India
Trade relation between the two especially Indonesia and the region has
been developed since long time back although the correct trade value
could not be acquired because the value in trade is registered and
accounted nationally. However, the figure obtained from the Ministry of
Industry and Trade of Indonesia, last year Indonesia could bag an
export value to India of US$248.020.7 or an increase of 23.53% (from
US$1.053,939,5 to US$1,301.960,2). By the same year there were also
21 foreign direct investments from India.
Since Januari until April this year, investment from India accounted for 7
projects with the value up of US$1,7 million or ranked 9 in terms of
project and 19 in terms of project value from 31 countries 31 registered
(minus CIS countries) countries investing in Indonesia. By the same
year, import value of Indonesia from India increased 7,45% (from
US$486.258,6 to US$ 522.490,8). Of course, not all the above figures
resulted from the Southern region of India but Mumbai and the
Southern states are surely the centres of capital of India.
Condition of Southern India and its relation with Indonesia:
Some points forward
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II.
SOME POINTS FORWARD
Examining the condition of the Southern Indian region, several points
forward could be mapped:
1. Cooperation in the field of higher education
The excellent progress that India has been attaining in the field of
education cannot be separated from its national education system that
aims to produce excellent output of education. Indian Government has
the vision of attaining the level of developed country from its present
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Some points forward
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status by the year of 2050. The downturn in steel (Tata conglomerate)
and textile industries (Birla and others) should not be wailed. The
winners of the 21 Century are those ones who cut the above the
knowledge economy. We shall be dependent much not on muscle but
information technology (IT) and biotechnology.
It is true that the number of educational institutions of a country shall
not automatically prove the higher progress of its technology, but the
number of new inventions in the field of science shall be a better proof
that indicates the success of India’s national education system. This
creates an impact on increase of Indian economy in the form of IT and
its related services export value where according to Nasscom (National
Association of Software and Service Companies) has reached US$10
billion in the period of 2002-2003. In the long run, progresses in IT and
biotechnology, which are exactly suitable for the present knowledge
economy, shall firmly position India in its process to attain the vision to
become a developed nation in the future.
Indonesia should take the opportunity being offered by excellent Indian
educational institutions for cooperative purposes. The Indian counterpart
to be partnered could be assessed by the output they produce that
respond to the global economic trend in the era of the present
knowledge-economy.
Some of the higher educational and also research institutions have
relatively possessed maturity compared to the their counterparts in
Indonesia. The ‘open policy’ in the field of technology, manufacturing
and other sciences in India is very much conducive for both countries
cooperation in education. Moreover, from the point of educational fees
India offers much cheaper compared to Western countries for the same
degrees. Other factor could Indonesia benefit from is that India is now
in the process of gaining Washington Accord accreditation which could
give a more mobility access to outputs of Indian technical schools
should it get the Accord.
For the last one year we have recorded some of the remarkable new
inventions done by the excellent institutions in India. The list we attach
herein.
2. Investment/cooperation in pharmaceutical industry
For Indonesia, there is big opportunity for developing its pharmaceutical
industry. Taking into account of the strength of Indian pharmaceutical
industry supported by the development in the sunrise biotechnology
industry in India and the rich biodiversity Indonesia posses, Indonesia
should attract more Indian players to invest in Indonesia. Although the
trend suggests the import has been declining, direct investment from
India in this sector could create a more efficient drugs prices in
Indonesian market. Thus, in the end will spur a more competitive
environment among players that could lead to the creation of more
inventions in the Indonesian pharmacy.
3. Cooperation in developing mutual benefit for film industry
Number of films produced in India has been remarkable which is around
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Some points forward
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800 per year. However, rapid development of media industry and
bargaining position that comes into the artist advantages, a condition
has been more and more compelling to the film industry to be more
stringent in budget. This pushes Indian filmmakers into finding
comparatively cheaper locations for filming.
Indonesia could tap this opportunity by offering its place with many
beautiful locations suitable for making Indian type of films. Adding more
to this, many of studios related to entertainment industry in Java could
be partnered with Indian filmmakers for post production filming process.
Several events held every year in India covering the entertainment
industry should be noticed well by Indonesia. The Ministry of Culture
and Tourism Affairs of Indonesia should have to be able to organize
different sections that make up the whole entertainment industry in
Indonesia into one delegation for the above events.
4. Other important sector for further talks
Indonesia should better consider reopening its direct flight to India. With
more and more middle class people emerge in India especially in the
South region resulting in more Indian people looking for holiday outside
the country, a chance to grab some share in the aviation industry to tap
Indian people flying to Southeast Asia is convincing.
Number of flights from foreign airlines operating in India are mounting
with many of them have consistent load factor of more than 60 percent.
The Indian carriers even bag more numbers with 90 percent or
maximum load factor. With the mounting number of interactions
resulted from trade and economy between the two countries’ people,
reopening of talks between the concerned authorities should be initiated
soon.
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Some points forward
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