C~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ IMPORT REQUIREMENTS OF IDmoNEsiA FOR 1967 IN THIE SECTORS OF TRANSPORT, -AGRICULTURE AND INDUSTRY Recommendations by a Mission -of the Initernational Bank for - ~~Reconstruction and Developmnent wasJigtn D.C. I. * November 1966 .R ~ ~ ~ ~ ~ ~ ~ 00 The recommendations in this document are those of a mission fromn t.he International Batu for Recon- struction and Development, whJ.ch visited Indonesia in September and October 1966. The members of the mission were Messrs. N. McIvor (mission leader), G. Darnell (agricultural specialist), G. Naylor and J. Parmar (industry specialists) and R. van Helden (transport specialist). Washington, D.C. November 1966 . VIWONESIA: IMPORT REQUIRENTS Introduction 1. In August 1966 the Indonesian Government invited the Intesnational Bank for Reconstruction and Development to send a team to Indonesia "to help identify the most critical shortages of raw materials and spare parts". Accordingly, in September-October 1966 a Bank Mission spent three weeks in Indonesia studying with Government officials the import require- ments for three stntors of the economy: transport, agriculture and in- dustry, sectors urgently in need of emergency imports. 2. The Yinistries and Departments concerned with these three sectors provided data on what they considered to be the imports required most urgently in each sector. Their import needs arise from plans and pro- posals for rehabilitation of these sectors and it must be recognized that such plans and proposals were those of the Ministries and Departments concerned rather than part of any official overall plan. The mission discussed the lists of proposed imports with the officials responsible for them and made visits in various parts of the country to ports, dock- yards, railway and highway workshops, farms, public and private estates, agricultural research institutes and factories. On these visits the main problems.. including immediate import requirements, were discussed .-tth mnw-°of the people engaged directly in management and operations in ze three sectors. 3. From the information provided, the mission has prepared the lists attached hereto (Annexes 1 to 15) setting out the imports requested by Indonesian officials and, alongside these, the imports recommended by the mission as of greatest urgency in the sectors covered. While these sectors are undoubtedly of the highest priority, it may, be possible for Indonesia to make a case for some Imports of equivalent urgency in other sectors which the mission did not investigate, for example telecommunica- tions. It is of interest to note that the Peoplets Congress has discussed the subject of priorities and concluded that prioritles, on a broad basis, should be in the following order: (a) food, (b) export promotion, (c) infrastructure improvement, and (d) textiles. The mission, while con- fining its investigations to the sectors of transport, agriculture and industry, did not feel in conflict with the priorities expressed by the People's Congress. 4. It was not part of the mission's task to describe or analyze the general economic and financial situation. The Government has stated that the most outstanding feature of the economy has been the ever-increasing rate of inflation; the cost of living index, on a base 1957 - 100, reached 348 in 1960, 36,000 in 1965 and 150,000 in July 1966. This inflation has come mainly from Government budget deficits; according to an official statement, in 1965 the deficit was 300 per cent of Government revenues and it has since become worse. It was evident to the mission that this inflation was responsible for many distortions that could be expecte- tio disappear if inflation could be stopped. The Government has announced ita intention to follow a stabilization policy aimed at curbing inflation. W4hile the Bank mission is making no judgement about the stabilization policy, it is convinced that a good measure of success in the stabiliza- tion effort is essential if the economy is to achieve a position from which it can expect to progress. 5. While the stabilization policy is being put into effect, much can be done to restore the effectiveness of infrastructure and equipment and to make better use of productive capacity. The transport sector is suffering from many years of inadequate maintenance. Industrial capacity is sadly under-employed partly because of the lack of spare parts, but mainly because of the lack of raw materials. Agriculture, based on a fertile soil, is in some respects quite efficient compared with some other countries of the area, but it is capable of an immediate improvement in output if it can get more fertilizers and insecticides. In these circum- stances, and in view of the scarcity of foreign exchange, the imports ne3ded most are materials and spare parts to give a quick return. 6. Replacement and new dev-.opment must be postponed to a later stage. Many units now in operation in the sectors covered by the mission should have been replaced in past years and many units are obsolete compared with modern technologies and efficiency. However, the needs of the eco- nomy are such that it is necessary, for the time being, to continue the operation of all operable units. In a few limited cases exceptions have been made where the existing unit was almost inoperable and vital to the successful operation of the entire plant. A capital expenditure program for replacement can and should be prepared for later years as foreign exchange becomes more freely available. 7. The mission's object, therefore, has been to identify, in the sectors covered, those imports which would make the greatest and quickest contri- bution to ths economy when imported within a period of about one year. There will inevitably be delays in ordering goods and in deliveries, par- ticularly if financed by foreign aid, so that many of the imports recommended by the mission will not begin to enter Indonesia until well into 1967. Imports for different sectors may begin to flow at different times during the year. The amounts recommended by the mission represent the estimated requirements for one year from the time they become available in Indonesia. 8. As one of the steps towards stabilization, the Government recently increased the percentages of foreign exchange earnings that exporters could retain or sell in the market, thus expanding considerably the free foreign exchange market, It is expected that the free market will be expanded even more as further stabilization measures are taken and that imports financed by foreign exchange acquired in this way will not be subject to license. These developments have some implications for the Bank mission's recommendations. The mission has listed those imports of most importance in the sect rs covered; but it will be necessary for the * Indonesian authorities to see that these imports can be acquired within the new exchange and import system. 9. At present, the basic and essential enterprises are generally short of funds for either imports or working capital. Price controls, the low level of productLon, wage increases, the added financial burden of in- creasing payments in kind to workers and the rapid inflation have effectively decapitalized these enterprises. In the opinion of the mission, most are - 3 - at present unable to finance from their own cash resources imports which require payment of rupiabs in the full amount at the time the foreign exchange is to be obtained. Under the freer system expected to prevail in 1967 the authorities will not be allocating exchange as in the past; importers will then be competing for the exchange available. This is a bighly commendable step, but it must be recognized that there will be complications during the transition period while the new system is being put into effect--a period which wili. more or less coincide with the period for arrival of those imports which the Bank mission is recommending. During the transition period some prices will still be controlled and some enterprises, even if their prices are de-controlled, will be suffering a cash shertage arising from the years of inflation and it will take time before such shortage can be overcome. Any state-owned, or private, enter- prise which has been subject to price control preventing adequate profits cannot be expected to have the rupish funds necessary for it to acquire foreign exchange in competition with industries whose prices have not been controlled. Similarly, a public enterprise such as a railway or city bus company will not be able to compete for foreign exchange if its fares are still controlled in such a way that it cannot generate sufficient cash funds. The authorities will have to watch carefully the effects of par- tial de-control in the transition period towards a freer economy. Credit restriction, an important part of the stabilization policy, will have to be applied selectively so as not to discourage production in fields where the Indonesian authorities wish production to be increased. 10. It appears necessary for certain imports to be prohibited for a period, at least until the basic requirements of the economy have been fulfilled, and the mission assumes that this will be done. Some thought is apparently being given to this point, but no list of prohibited im- ports has yet been prepared. It is understood that the Government will also give attention to modifications of import surcharges, applying higher surcharges to less essential items whose import it wishes to discourage. Enterprises should be given a clear picture as soon as possible of per- missible imports and of import surcharges to allow them to plan adjustment to the rnew conditions of 1967. 11. The mission's main conclusions are the import requirements recommended in the Annexes. The mission recognizes that the officials of the Indonesian Ministries and Departmants may not agree on all points with the mission's views, which were formed after covering a wide field in a short time. Moreover, the recommendations to reduce or eliminate certain items requested does not necessarily mean that those items should not be imported if apple funds are available. The mission is not in a position to say exactly how much foreign funds should be made available for the imports recommended since it does not know how much will become available from various sources, the most important of which is, of course, Indonesia's own foreign exchange earnings. Therefore, although specific figures are recommended in the Annexes, they should be regarded as figures for guidance, reflecting the mission's views as to priorities, rather than a hard and fast determination of the amounts which should be spent on each item. The mission is assuming that Indonesia's own foreign exchange earnings will be used, including possibly foreign exchange holdings abroad, to import required spare parts for which foreign aid is not available. It would be useless to import raw materials for industries whose equipment had not been put into operable condition. - 4 - 22. The mission does not wish to imply that the imports it recommends will all be used 100 per cent efficiently. This is not possible in the conditions likely to prevail in Indonesia over the next year or two, or even longer. It believes, however, that those imports can be used to give a reasonably good return to the economy quickly and that they are, therefore, justifiable and urgently required. 13. Two matters of considerable importance should be mentioned, although they are not directly within the mission's assignment. Although high priority is wisely assigned in Indonesia to export expansion, the mission heard little discussion at any level, public or private, regarding this subJect. It is vital for Indonesia to mount a vigorous nation-wide ex- port drive, Similarly, a program of import substitution is urgently needed. 14. During its investigations, the mission noticed that, not surprisingly, the standards of operation of enterprises have in many cases fallen in recent years. Owners and management have had to put most of their energies into obtaining raw materials and preventing bankruptcy. I4any of the stan- dards of good housekeeping have fallen into disuse. Modifications in processes for greater efficie;ioy were postponed. New and modern equipment was unavailable and advanced knowledge difficult to obtain. It is impor- tant that as import conditions improve enterprises should: (a) re-establish conditions of good housekeeping; (b) raise product and service standards to acceptable levels; (c) consider plant rearrangement for improved effic- iencies; (d) improve operating practices; (e) study advanced equipment before replacement selections are made; and (f) establish employee and staff training programs. From the plant visits made by the mission, it was obvious that there are factories in Indonesia which are well planned and well kept and efficiently operated. They are too few. Increased raw material availability would create keener competition and force the in- efficient ones out of business. It is essential that broader application of worker and staff training be established in industrial and other enter- prises as a means of upgrading employees. A commendable program of this type is in fulll operation at the army workshop at Bandung, which could well be expanded there and elsewhere in the country. There is an aware- ness in certain Governmental and industrial circles that the time is ripe for Indonesia to seek assistance abroad from specialists who could help to bring operating methods and techniques nearer to a competitive world standard. 15. The following paragraphs outline the background in each sector to the recommendations given in the Annexes. - 5 - TRANSPORTATION 16. During its discussions with Government, officials of the Departments responsible for the transport sector (sea communications, railways, roads, aviation and road transport), the mission was presented with some overall rehabilitation plans for each of the above sectors. Annex 2 gives a summary of the foreign currency cost of these plans for 1967 and 1968. 17. As mentioned earlier (paragraph 2) these plans were put together by the various Departments and do not form part of an official overall plan. The plans do not take sufficient account of the limited availability of both foreign and local financial resources and there is reason to doubt that the amounts shown, even if available, could be efficiently used in such a short time because of linited human resources. Furthermore, the plans are inconsistent since some include sizeable amounts for expansion rather than for rehabilitation of existing capacity. For example, new planes and expansion of airport facilities are requested for aviation and new diesel locomotives for railways. Some plans, however, are limited to what at best can be done in the first two years, without claiming to rehabilitate all that needs rehabilitation; for example, the road plan. The mission's recommendations in Annex 2 show the order of magnitude of the amounts in foreign currency needed to put the countryts transporta- tion system into a condition to meet reasonably well the country's transport demands in the near future. 18. Whereas the mission's task was limited to putting together a list of the most urgently needed spare parts, supplies and raw materials to re- move present bottlenecks, it should be recognized that in some cases repairing what was already there is either not enough or possibly even wasteful. To take one example, the road system is still largely the 1939 network in a very dilapidated condition. There is little point in reconditioning a system designed for axle loads of 1.5 - 5 tons since such a network is inadequate for present day traffic. 19. By the same token, there are some items which under normal conditions can and should be produced domestically but for which the production capac- ity is insufficient because (a) a backlog has to be made up, and (b) the present production capacity is far below the needs. Two typical examples are vehicle tires and railway sleepers. Imports of tires will be needed to get the existing road vehicle fleet moving again within a reasonably short period of time (provided spare parts for the vehicles are also made available). Thit it would, of course, be a better policy to limit tire imports to a minimum and to restore and expand as soon as possible the domestic tire industry. With respect to sleepers, in the past local djatti or other hardwoods were used. However, not enough is available to catch up with the backlog and its export value is high. Therefore, consideration must be given to establishing as soon as possible a plant for concrete sleepers and possibly a wood preservation plant to allow the use of domes- tic softwoods. Recommendations for such investments go beyond the compo- sition of a list of urgently needed spare parts and raw materials, but the mission feels that such a recommendation is justified. 20. Where so much is urgently needed, it is difficult for the mission to establish priorities within each transport sector and even more so among - 6 - the various tranport sectors. This problem is aggravated by the fact that there is ittle coordination between the three ministries involved in transportation: Maritime Affairs for sea commuications, Public Works for roads and Transportation and Conanications for railways, road trans- port and aviation. Maritime Affairs 21. Speaking generally, the mission believes that restoring domestic inter-island shipping deserves the highest priority. In a country of thousands of islands, domestic shipping performs the same function as trunk road and rail transport in other countries, Rehabilitation of the inter-island fleet means, in practice, the restoration and possibly ex- pansion of the domestic dockyard facilities and provision of the necessary spare parts, raw materials and supplies. Also navigation facilities like buoys and lighthouses, which are largely out of operation, deserve high priority. 22. On the other hand, the mission considers any provision for inter- national shipping of low priority, for two main reasons. First, ocean- going vessels are foreign currency earners travelling to foreign ports where docking facilities, parts and materials are available and they have been better maintained than inter-island vessels. Secondly, even if Indonesian ships were not available, ships of other countries will be available to meet the country's economic needs. The disadvantage some- times mentioned, that using foreign carriers would cost more foreign cur- rency, is exaggerated; a large part of the Indonesian carriers' costs of amortization and depreciation, interest, operations, supplies, etc., are foreign currency costs; even the crew has to be paid partly in foreign currency. 23. The mission believes that the capacity of port facilities in general is adequate to meet the demands in the near future. Problems in the past have resulted mainly from operatio-al and administrative defiuiencies such as complicated and changing customs regulations and shortage of funds on the part of importers to pay import duties, etc. Also, the importers (frequently State companies) are sometimes in no hurry to remove the cargo from the transit sheds (for which the storage rates are low) to warehouses, which would involve double handling. The mission observed that recent administrative measures to remove the serious congestion in the sheds have improved conditions; but it would appear that there is still room for stremalining the cargo handling further. Indeed, many cranes are old and are either out-of-order or have limited lifting capacity because of poor maintenance. But cranes are not an absolute necessity since the ships' loading gear can be used, as is the practice in many ports in other coun- tries. WTith respect to fork trucks, though desirable and sometimes re- quired for heavy lifts and high stacking in the shedq much can still be done by hand carts. 24. The mission was informed that to date vessels of about 12,000 tons D.W., which is the usual size of vessels sailing to and from Indonesia, have not yet met with great difficulties because of the backlog in dredg- ing, even though the backlog is some 45 million cubic meters. On top of this backlog the annual siltation at all ports is estimated at some 22 million cubic meters. Therefore, the rehabilitation of dredging equipment - 7 - (the figures for which are included in dockyard and fleet rehabilitation) deserves high priority. But further expansion of the fleet to catch up with the backlcg may not be Justified; this can possibly be done better and faster by contract with foreign dredging contractors. A very consid- erable part of the annual dredging needs is for the very long river approach to the oil port of Djambi in the Palembang area. Because of the growing trend of the size of tankers and ocean-going vessels, it may eventually be mdre economic to build a pipeline to a new terminal and port at the mouth of the river. Air Transport 25. Domestic aviation is a very important transport mode in an archipe- lago like Indonesia and the mission gives high priority to Garuda Indo- nesian Airways domestic operations and to those of the Nerparti Nusantara which operates the feeder lines. On the other hand, Garuda's international air transport is not an important economic need. As with international shipping, any shortfall in capacity can be easily met by airlines from other countries. Even more than for shipping, the cost of Garuda's inter- national activities for amortization, interest and operating expenses is largely a foreign currency cost. Railways 26. As to railways, they play, or should play, an important role in land transportation. But the Indo1-esian railways arc principaIly a passenger railway. The ratio of passenger kilometers to ton kilometers is remark- ably high, 8.5 to 1; on Java the ratio is even higher. Since it is usually agreed that the economic importance of goods transport is much bigher than that of passenger traffic (which is likely to include a good deal of non- essential traffic resulting from much too low passenger rates) rehabilitation efforts should be concentrated first on the improvement of goods transport. Although there is little doubt that considerable physical improvements are needed, improvements in operations are also needed and are possible. The mission observed that freight cars in service move less than 20 Km. a day, which is an extremely low figure. &aphasis should, therefore, be placed on train and car dispatch control. Emphasis should also be given to the increase of motive power by repairing locomotives rather than by the pur- chase of rolling stock. Nevertheless, it must be recognized that improve- ments in track and signalling are important for the safety of passenger traffic. The planned track improvement program will take many years and requires large amounts of foreign currency. For such a program the lack of sleepers proves to be the bottleneck and the actual production thereof should start before any more rails are purchased. Therefore, speed re- ductions may have to be imposed more widely for some time. However, it is obvious that reducing the speed of freight trains has hardly any effect on the turn-around time of cars as long as the daily movement of the cars is as low as it is. Roads and Road Transport 27. A difficult transport sector for the mission to express an opinion on is roads and road transport. The road standards are largely pre-war, varying from 1.5 ton axle loads for fifth class roads to 7 tons for first class roads, of which there are only a few hundred kilometers Rehabili- tating roads to tbhse inadequate standards would be wasteful. But an - 8 - overall upgrading and rebabilitation plan for a 30,000 Km. network (plus 50,000 Km. of country roads) is, of course, a major operation requiring many years. Such a task requires more than just reconditioning existing * equipment; additional types of equipment would be needed which, in Indonesia, have never been used before an a large scale. At the sane time, road mintenance operations will have to be improved and mod3rnized. Finally, the responsibiities and activities within the highway departments on the various administrative levels would require reorganization. Tech- nical assistance would be needed in the preparation and execution of such a large-scale operation and contractors should be used rather than continu- ing the present force account methods. 28. The mission, therefore, does not agree with the 1967-1968 plan as presented to it, which envisages the rehabilitation of about 3s000 Km. of roads to 5 ton axle load standards at an average coat of about $4s,000 per kilometer. It believes that for the first year the emphasis should be on patching and making impassable stretches passable, possibly with the help of the Army's civic missions. In the meantime, the plans should be prepared and the organization set up for the major undertaking mentioned above. 29. With respect to road transport, the problem is that only roughly estimated and unreliable data are available since passenger cars, trucks and buses are largely in private hands. On the basis of figures presented to the mission, about 400,000 buses and trucks and 38,000 passenger cars are out of operation but repairable, requiring some $20 million for spare parts and $30 million for tires. The mission has no way of checking these figures, but feels that they may be on the high side. In any event, the Government expects to import directly only half of these amounts, expecting the balance to be covered by foreign exchange from the free market or Indonesian funds still held abroad. Rumors have it, however, that a con- siderable amount of spares, and maybe also of tires, are still hidden some- where within the country by people who have bought them as a more secure invstment than rapidly Inflating rupiahs. The mrssion, therefore, feels that automotive parts and tires should be imported only cautiously and gradually since even modest imports may lead to unfreezing the still avail- able parts. The mission strongly recommends that no new road vehicles be imported until all repairable vehiles have been repaired, which should about double the presently operational fleet. The armed forces have a large number of vehicles which can be used to meet peak demands, as is apparently already being done. If, as appears necessary, a "prohibited import" list is to be instituted for a period, road vehicles should be among the items listed. * Telecommunicat+ons 30. It appears that the country's telecommunications system is severely deficient. The mission was presented with a rehabilitation plan for tele- communications, but could not study this because the team did not include a telecommunications expert. However, the plans for sea communications, railways and aviation all include sizeable amounts for the rehabilitation and expansion of their communications systems. The mission lacks the expertise to judge wbether the demands of these departments would or should in any way be affected if the country's overall comnjnications sys tem were in good condition. It is obvious that particularly in an island - 9 - country like Indones.'a a good communications system is an absolute neces- sity for both the public administration and the private business wor'd and thus should be given a very bigh priority. Therefore, the mission recommends that the needs for this sector be studied as soon as possible by an expert in this field. I - 10 - A0ICULTURE AMWD ?TATES Ninistry of Agriculture 31. Statistics of agricultural production and imports are limited in Indonesia, but it is evident from the dat& available that despite in- creasing production of rice the production per capita has fallen as a result of a more rapid rise in population. As a consequence, the gap be- tween local production and total needs has widened, calling for more imports. The rice deficiency is most noticeable in the cities. Infla- tion is the major deterrent to the flow of rice from surplus to deficit areas, since there is little incentive for producers to exchange rice for a c'rrency of rapidly dimi-nishing value. Imports of rice in 1963 and 1964 wt.%q over 1 million tons annually, but were less in 1965 due prin- cipally to shortages of foreign exchange. Prices in the cities showed a dramatic increase in the second half of 1965 as a result of the reduced import 'level. Official estimates of the probable deficit in rice for 1966 have varied from 500,000 to 1 million tons. This represents the amount regarded as necessary to meet the requirements of the 110 million population over and above 1966 production. Imports at this level would cost $70 to $140 million in foreign exchange, and thus mean a severe drain on the economy. 32. There are some 7 million hectares of sawah (paddy land) cropped annualvy in the country and agriculturally there is nothing to prevent Indonesia being self-sufficient in rice and even having an export surplus as they had pre-1940. Some promising schemes in agricultural extension have been successfully initiated. These schemes, Bimas projects in the vicinity of Djakarta and the related Dewi Sri Djaya in West Java and Medan Djaya in North Sumatra have brought about the adoption of improved tech- nology resulting in a rapid increase in rice production on irrigated sawah, Increases in yields are conservatively estimated at 20 quintals of paddy (1 ton milled rice) per hectare. The mission visited several sawahs par- ticipating in the Bimas projects in the current 1966 season and was most impressed by the results obtained and the enthusiasm of the farmers and officials concerned. Basically, success has been achieved by introducing improved seed which is highly responsive to fertilizer under controlled irrigation. The extension agents used were mainly students from agricul- tural faculties and schools who lived in the villages participating in the schemes for the whole of the paddy season. They showed great enthusi- am and provided the catalyst for supplies of fertilizer on credit, in- secticides and the improved seed necessary if additional investments were to pay off. They also helped to gain the acceptance of better agronomic practices. At present, there are some 300,000 hectares under the various schemes and the Government plans to increase this to 1 million hectares. Fertilizer should have been on hand by mid-October to enable an expansion in the 1966/67 rainy season. As this was not the case at the time of the mission's visit, it may even prove difficult to maintain this area effectively. 33. For the full program of 1 million hectares the following would be required: 100,000 tons Urea ($100 c.i.f. per ton) $10,000,000 100,000 tons double super Phosphate ($80 c.i.f. per ton) 8,000,000 Insecticides, etc. 4l,500,000 Sprayers (1 for every 20 hectares) 50,000 - Assuming 50 per cent already avallable 25,000 @ $30 750,000 This would result in an increased output of the order of 1 million tons equivalent of milled rice. Thus, such an area would eliminate the need of rice imports valued at $140 million at a foreign exchange cost for imports of, say, $24 million, an annual saving of some $116 million of foreign exchange. 34. The mission believes that such a program should be wholeheartedly en- dorsed and that provision of the foreign exchange for the necessary inputs is of top priority. Every effort should be made to achieve this level in the rainy season 1967-1968 and to do so the necessary imports must be on hand by mid-October 1967. In the past, many other Indonesian food pro- duction projects have been hampered by lack of logistical support, and care should be exercised to ensure that the necessary improved seed stock from Government farms in the project areas iF, available when needed. Also that the student participation should not be too dispersed in order that participating farmers receive the maximum help and guidance that is possible, particularly in the new areas under the schemes. 35. There is widespread demand for fertilizer and insecticides in Indonesia. During the mission's visit, some vegetable growers in the Surabaja area were paying 800 rupiahs per quintal for urea (controlled price 240 rupiabs) and borrowing money at interest rates up to 20 per cent per month in order to pay for it. At present, there is only one fertilizer factory in the country with a capacity of 100,000 tons of urea annually. Despite the tremendous internal demand, the factory recently sold 10,000 tons to Japan (at $68 per ton f.o.b.) in order to obtain foreign exchange to purchase such things as paper sacks and spare parts urgently needed by the factory. Ministry of Estates 36. The foreign exchange regulations of the past few years have very ad- versely affected the financial condition of the estates. Until October 1966, the estates were allowed to retain in foreign exchange 10 per cent of the "fixed" export price (usually fixed at a figure below the actual export price), a further 10 per cent went to local government for devel- opment purposes and the balance of 80 per cent was paid to the exporter in rupiahs at an exchange rate of 10 rupiahs per U.S. dollar, while the free rate was 100 to l140 or even 150 to the dollar. However, the estates could also retain the excess of their actual export price over the "fixed" price which improved their return to some extent. The net result, in a period of raging inflation, was that very little development expenditure was undertaken and only limited quantities of fertilizer and insecticides were utilized. This situation has been improved by the new regulations which have increased the percentage of foreign exchange to be retained by the estates from 10 to 50 per cent. - 12 - 37. 0f the estimated 825,000 hectares planted in estates, some 65 per cent is under the direct control of the Ministry of Estates and the balance is privately owned. The mission had an opportunity to visit several es- tates, both in the public and private sectors. As a result of the foreign exchange regulations outlined above, the majority of the privately held estates have been exploiting their assets. Field conditions have deter- iorated, roads and field drains have been neglected and weed control, in many oases, did not exist. The estates under the direct control of the linistry, however, have been much better maintained as additional funds have been forthcoming from the Government, On these Government estates, replanting has been undertaken =n a very limited scale. In 1963, legis- lation compelled the rubber estates to replant 4 per cent of their total acreage annually. As a result of exploitation and lack of replanting, it is expected that the overall production of rubber, in particular, will decline in the forthcoming years. 38. Despite the very serious backlog of deferrel maintenance, there was no evidence to suggest that any production had been lost due to insuffic- ient or inadequate processing facilities. The mission believes that re- placement of such facilities, though by normal standards long overdue, should be deferred until such a time as the overall foreign excbange situation of the country has improved. The mission, therefore, has not recommended replacement or expansion of existing facilities with the exception of two small Hevea Crumb factories, which are required to handle the increase in production expected from areas of rubber which will be coming into tapping in 1966/1967/1968. 39. The mission recommends that imports be restricted to essential factors of production and, as such, fertilizer and insecticides are of major im- portance. Despite the recently relaxed foreign exchange regulations, the mission believes that the private estate owner does not have sufficient incentive to tie up long-term development capital by investing in fertil- izer, etc. for immature plantations, although he will use some fertilizer for immediate increases in production. The mission believes it unlikely, therefore, that the private estates would use fertilizer to optimum levels even if such fertilizer were readily available in the country. The re- quested amount of fertilizer has been reduced accordingly. If inflation were to be overcome and retention of foreign exchange earnings freed still further, the attitude of the private estate owner could be expected to change and he would then spend more money on fertilizer to give a longer- term return. 40. There appears to be a lack of overall planning in the Miistry. Present policies are to replint existing estates with the same crop and no attention has been given to long-term commodity projections and esti- mated costs of future production. The mission believes that many estates would be more competitive in the future if they replanted with oil palm rather than with rubber. This ldck of planning is also evident in the current plans to expand the existing sugar factories in the Surabaja region. Indonesia is at present producing some 50,000 tons of sugar over and above its domestic requirements and exporting this sugar at a price of about $32 per ton f.o.b. This price is well below their costs of production but despite this expansion plans are being actively developed. In order to expand to the target acreage of sugar cane some existing paddy land will go out of production which will make the rice deficit worse. - 13 - 41. There appears to be some over-staffing in the Ministry and the mission believes that further decentralization would facilitate effective admin- istration of the estates. However, the Ministry should review its ovorall policies and lay down guideli.e for the separate divisions of the Minis try. Nitrogenous Fertilizer Needs 42. The Ninistries requested the following amounts of nitrogenous fertilizer: 000 Tons Ministry of Agriculture 171 Ministry of Estates 170 m2i The mission's recommendations, that is, what it believes are realistic utilization possibilities for 1967, are: Ministry of Agriculture 120.75 Ministry of Estates 100.00 2075 Of this, 100,000 tons of urea can be supplied from local production, leaving 120,750 tons to be imported. - 14 - INDUSTRY Orsa4nzation 43. The industrial sector of the Indonesian economy falls within the jurisdiction of the following two Departments, which are in turn divided into units managed by Directors General: a) Department of Basic, Light Industry and Energy: (1) Basic Industry; (2) Light Industry; (3) Chemical Industry; (4) Energy; and (5) Aircraft. b) Department of Textiles and Cottage Industry: (1) Textiles: Spinrd.ng and Weaving Factories; and (2) Cottage Hand-Weaving Industries. General Observations 44. To import raw materials during recent years, industry had to secure foreign exchange either by direct allocations from the Government or by purchasing export bonus certificates in the free market. In most instances, the amount of exchange received fell considerably short of needs. In each case, the importer had to pay the corresponding value in rupiahs in full at the time the direct allocation or the bonus certificate was obtained. 45. Under these conditions, the opportunity to obtain spare parts or raw materials was dependent on a company's ability to generate cash from profits or credit. Only profitable industries possessed cash and thus gained an advantage over less profitable industries in acquiring raw materials and parts. The possibility of earning profits depended largely on whether the product was price controlled. 46. As could be expected, the basic and essential industries whose prices were controlled have suffered most from the overall shortage of imported materials and spare parts. Price or profit controls, both direct and in- direct, have been applied to these industries which, in general, are state- owned enterprises. Price and profit controls were not universally applied and distortions have occurred. For example, the price of cotton yarn was controlled whereas woven fabric made therefrom was uncontrolled. With a shortage of consumer goods, the price of finished fabrics rose in keeping with demand and the inflation. This made the weaving operations in inde- pendent hands very profitable while the spinning operations in Government factories were unprofitable. 47. Imports for the basic industries have been limited by the lack of both foreign exchange and credit. In these circumstances, industries have tended to husband imported materials until they could get new supplies and most state-owned industries, as well as private companies, have drastically reduced their rate of operation to stretch the raw materials over a longer period of - 15 - time, in many cases reducing the working period to as low as three or four days per month and reducing the number of employees to a minimum. Thie mission expects that most industries will continue to husband imports and set aside at least 50 per cent of the materials obtained under the current program until there is convincing evidence that a smooth, continuous supply of imported materials is assured. 48. The spare parts shortage did not appear to be as serious as the mis- sion expected, for four reasons. First, to the extent that companies had cash they purchased foreign exchange offered through export bonus certifi- cates and imported essential parts; secondly, limited allocations of foreign exchange for this purpose were made to essential industries; thirdly, general stockists kept inventories of parts as a profitable hedging op- eration against the severe inflation; and fourthly, and most important, many spare parts were produced locally. 49. In recent years, the units of energy produced in some areas have de- creased annually because the state-owned power companies have been short of spare parts. These shortages of power naturally lowered industrial output in affected areas. Truck and rail transport were unable to maintain full operations for similar reasons and this also reduced industrial pro- duction. As could be expected, the energies of industrial managers have been spent in chasing cash and raw materials to the almost complete dis- regard of production efficiencies, employee-training and product development. 50. An encouraging feature in the industrial picture is the substantial number of engineers, scientists and technicians (some trained overseas) from whom a great contribution can be expected. Criteria for Mission Recommendations 51. Not since 1958 or 1959 have industries in Indonesia experienced con- ditions which would allow them to push their equipment to its maximum annual output. Certainly only a few plants (such as cement and urea, which were generally provided with adequate raw materials and spares) have consistently attained the levels of rated capacity for the equipment installed. 52. In assessing import needs, the mission decided that it should use as a target the raw material and spare parts requirements necessary to reach the "maximum previously attained annual production." The existing data indicates that such a year last occurred in the late 1950's. This level was selected also to allow for such limiting factors at that time as power shortages. Many limitations of the previously high production year would certainly apply today, and perhaps more severely. The mission concluded that if spare parts and raw materials for essential industries were pro- vided in a quantity that made such production levels attainable, it would represent a reasonable goal for Indonesia's essential industry in the immediate future. 53. When the authorities began in mid-1966 to assemble data for the re- habilitation of the industrial sector they prepared a "crash program" for 1966 and a full level of operations for 1967. With the slippage of time, it was clear to the mission in October that few spare parts or raw materials would be imported during the calendar year 1966 or possibly even before the middle of 1967. - 16 - 54. Ideally, repairs should be completed prior to the arrival of raw materials. In many industrial companies the spare parts inventory is too small or seriously out of balance. The mission's view, however, is that spare parts to be provided within a twelve-month period could not justi- fiably cover all current needs plus a full restoration of spare parts inventories to their proper level. 7he mission feels that inventories should be replenished over a period of about five years and attempted to reflect this level in its recommendations. The mission is convinced that its recommendations generously cover the needs on this basis. 55. While the mission requested the Indonesian authorities to provide an order of priorities for the numerous industries involved, this proved im- possible to obtain in detail in the limited time available. To some extent priority is indicated by the amounts of foreign exchange set forth in the Departments, revised requests and in the amount recommended by the Mission for each of the industries. 56. The Directorate General for aircraft is included within the scope of the Department of Basic, Light Industries and Energy, but this activity was surveyed as part of transport needs and is discussed in the Transpor- tation section of this report. 57. While the mission did not investigate utilities in general, the needs of the power generation and gas producing sector are mentioned in this industrial section because of their close effect on industry; but these needs are not included in the Annexes. Assumed 1967 Operating Conditions 58. The mission has had to make some assumptions about the conditions that may apply in 1967 when imports begin to arrive in Indonesia. If there is to be a rapid improvement in the economy, it must embrace the essential sectors of the economy which must be able to secure the imports urgently needed. It is assumed that the Bank Negars Indonesia will give early attention to the working capital needs of the state-owned industries, only a very few of which have adequate working capital. 59. It is assumed also that the Government will follow through on its expressed intention to discontinue all direct controls on industry, elim- inating price and profit controls and reducing or eliminating subsidies. It is assumed that the state-owned industries iwill be given freedom to operate independently, controlling their own costs, their selling prices and the products manufactured. It was indicated to the mission that Government policy will be to Judge these state-owned industries on their profit-making performance, and there is a strong inference that they will be shut-down or sold if losses persist for long periods. (In this connec- tion, it is worth noting that the state owned or controlled industries have recently been permitted to raise their prices to a point where they produce a profit of 20 per cent above "cost". The mission was unable to obtain a clear definition of the elements contained in the term "cost", and feels that 20 per cent could be inadequate in industries having high capital investment. It is, nevertheless, a step in the right direction.) It is further assumed that under this revised policy the state-owned in- dustries will be permitted, if they so desire, to do their own marketinE rather than continue to use state trading corporations. _ 17 - 60. As mentioned in the introduction, Indonesia could profitably employ specialists from other countries to improve operating methods and techni- ques. Examples of the needs for such experts in metal fabricating in- dustries are given in the reports written in 1964 under the title "Devel- opment Projects Consulting Service Indonesia", the joint venture of Surveys and Research Corporation and Daniel, Mann, Johnson, and Mendenhall. The mission suggests that the Director General of Basic Industry consider em- ploying a group of four or five specialists, each with experience in dif- ferent facets of the metal industry who could help him by visiting, studying, advising and improving operations and profitability in the state corpora- tions under his Directorate. Similar arrangements might prove desirable for other industries also. Comments on nS cific Indust Grous Basic Industry 61. It was an understandably difficult task for this industry to establish its foreign exchange requirements. The demands for the type of wO.ni per- formed and the products made by the industries in this group, whether pub- licly or privately owned, depend in a large measure upon the programs of other industries. Repair work or new machines for the sugar mills or rubber estates, for example, depend upon the profits which those or.-3,2iza- tions are earning or have the prospect of earning. Many piec-.t -) .lip- ment are used in the building industry and the demand for these is dependent upon funds budgeted by Government agencies or private owners. 62. In these circumstances, the Directorate expressed an original require- ment of $20,120,000 for the Government-owned companies under its jurisdiction and $19 million for the group of companies privately owned, a total of $39 million. After considerable discussion and reassessment, the Directorate presented new requirements amounting to $10,060,000 for the Government com- panies and $6,900,000 for the private group. It should be noted that the Directorate eliminated all foreign exchange requirements for truck and bus assembly in stating their revised needs, and this conformed with the views of the mission as expressed in the Transportation section. 63. While the Directorate did not subdivide these revised needs amongst the several participants, the mission has made such a subdivision in Annex 12 in the hope it would prove useful. 64. Annex 12 shows the requests and recommendations made. Against $10,060,000 requested for the state-owned corporations, the mission recommends $10,040,000 but, while similar in amount, the mission's recommendations represent a new allocation among the various heads. For the private com- panies, on the other hand, the mission considers $9,850,000 to be justified against the revised request of $6,900,000. For example, tire valves should be produced in sufficient quantities for the tires to be produced domestically. The manufacture of car batteries should have a reasonable level of production if cars, trucks and buses are to be maintained in operation. Machine shop operators and producers of electrical goods should, in the opinion of the mission, receive more imports that the Directorate requested. - 18 - Light Industry 65. This industry group produces, in the main, essential civilian products. Many of them directly support the recommendations made in the Agriculture and Transportation sections of this Report. Others contribute to the effectiveness of the priority industries selected by the People's Congress, namely food, export expansion, infrastructure improvement and textiles. 66. The data regarding this vast group of industries is sketchy and the needs were originally overstated. It seemed that many companies were optimistically anticipating a three-shift operation and stating needs on that basis. Quite obviously it would be impossible to produce at this high level over the first year and difficult, for reasons stated elsewhere, to find the rupiahs necessary to purchase the foreign exchange required. 67. In addition to the general criteria applied to all the industries, the mission requested data on the allocations of foreign exchange over the last five years to each activity in this group. In general, the highest allocation in these four years occurred in 1961, and this would, in fact, represent a marked improvement over the recent past. It also asked the officials to review their requests, reducing them to a more practicable level, and, where possible, to adjust the revised requests to refleck priority needs between the different items in the list. Annex 13 states the original request, the revised request, the mission's recomrendt-Lions and., in addition, the highest allocation made to each product category in any year of the 1961-1965 period. Chemical Industries 68. The mission was impressed by the careful documentation of needs pre- sented by the Directorate General of the Chemical Industries. The Djakarta administrative group and the personnel at the several plants visited by the mission were able to justify and substantiate these requests. 69. A careful study of the specific products made by the factories in this group clearly shows that all of the products justify the highest priority in view of their contribution to the economy. It is interesting to note that most of the products produced have a high percentage of indigenous products and services in their finished value. It is equally interesting to observe that all of them have a direct connection with the list of priorities established by the People's Congress. As shown in Annex 14, in the main the mission recommends the requested amount for each of the in- dustries in the group with the exception of two. In the case of tires, the mission recommends $7,230,000 for supplies against a request for $5,225,000; for fertilizer $1,600,000 is recommended against a request of $1,300,000 70. In the Transportation section of this Report, emphasis is placed on the need for tires to keep trucks, automobiles and bicycles in operation. To fulfill the country's needs, a large number of tires will be imported since the local factories are able to produce only a portion of the require- ments. But, because 50 per cent of the content of the domestically pro- duced tire is of indigenous origin, the mission reasons that everything possible should be done in present circumstances as an exchange saving measure to produce the maximum number of tires locally. It is the mission's - 19 - opinion that the existing equipment has not been pushed to capacity for many years because of shortages of imported materials. The management of the companies would be encouraged by an adequate level of supplies to improve production techniques and thereby attain maximum production. If the mission has erred on the high side, no damage will be done because the materials have long shelf life. In due course, consideration should be given to modernizing the facilities and expanding domestic production. 71. In the case of urea fertilizer, the mission recommends $1,600,000 for spare parts, supplies and chemicals against a request for $1,300,000. In the Agriculture section of this Report, great emphasis is placed on the need for additional fertilizer to maximize food production and the quan- tity of exportable crops. Certainly every possible ton should be produced domestically in present circumstances since the foreign exchange cost per ton of domestically produced urea, excluding financial charges for debt retirement, is $16 compared with a foreign exchange expenditure of $904100 per ton for imported urea. A small expenditure for three new urea storage tanks would make it possible for this plant to operate with a better bal- ance between the ammonia and urea sections of the process. Out of this better balance could come a slightly higher annual yield. An adequate allotwance for imports of craft paper for bags seems advisable also. The early completion of redesign and repair work on certain pieces of equip- ment to decrease down-time should also be encouraged and this can best be done by assuring this plant of adequate amounts of foreign exchange to accomplish it. 72. Although outside the scope of the mission, it would seem in order to mention the report of additional amounts of natural or refinery off-gas from the two adjacent refineries sufficient to support a three-fold addi- tion to this plant. It is suggested that Indonesia give early consideration to this expansion in its future development programs. 73. Of the three cement plants listed in Annex 14&, Gresik is the largest. Tomasa has long been in operation and is less modern. Padang is in the last phases of construction and should be operating early next year with an annual production approximately 50 per cent of Gresik. 74. Total production of cement is well below present requirements. Ade- quate limestone and an excellent site is reported to exist near Djakarta, which is the largest cement consuming area. Additional cement is also re- quired in the Surabaja area and Gresik has plans to install a third kiln which, of course, could be done at low cost since ancillary facilities are adequate. These plans might also be taken into consideration as Indonesia prepares its development program. Textiles 75. There is a wide imbalance in the different equipment groups of this industry. The spinning capacity amounts to only 28 per cent of the country's requirements even after recent additions of spindles. Three plants promised by the Peoples Republic of China are no longer expected. 76. Price control on yarn has prevented profits in the spinning sector. The lack of cash and the shortage of direct foreign exchange allocations have resulted in existing plants operating below capacity; first, because - 20 - of lack of spare parts and, second, because of lack of cotton. The small indigenous cotton production has been husbanded to mainitain a low level of production thereby retaining trained employees. 77. The failure of the Government to supply sufficient amounts of rupiahs to cover the local construction costs and equipment installation has de- layed the completion of several new spinning mills for as much as three years. As a result, costs of completion increased beyond the original budget, machinery parts were lost or broken, equipment was corroded and suppliers' guarantees were voided. 78. With the prospects of new supplies of cotton, some through P.L. 480, the Indonesian Government and in particular the management of the textile operations should purchase immediately all requisite spare parts to place every spindle into full operation. In this manner, foreign exchange will be saved that might othenrise be expended in having the yarn spun in Hong Kang, Japan or elsewhere. 79. Thirty thousand spindles and ancillary equipment are arriving shortly in Palembang from East Germany. None of the buildings for the plant has been constructed and there is little or no storage space. These spindles could be redirected to existing spinning plants and operated there immed- iately, otherwise they would be idle for two years. The Palembang plant need not be permanently penalized by this arrangement because subsequent purchases of spindles could be directed to Palembang in an equal or expanded quanti uy. 80. The weaving capacity of Indonesia is capable of producing on a one- shift basis a quantity of textiles equal to 9.6 meters per capita as com- pared with the target of 8 meters per capita for 1968. There is, therefore, no immediate concern regarding the capacity of this part of the textile industry. 81. As with the spinning capacity, the finishing capacity is well below requirements, equal to approximately 37 per cent of requirements when based on the target quantity of 8 meters per capita. Furthermore, it ap- pears that the finishing equipment is in need of modernization as well as expansion as soon as conditions permit. 82. The target of 8 meters per capita by early 1968 is an increase on the 7 meters set for 1967 and on 6 meters for 1966. A considerable shortfall from the 1966 target of 6 meters is certain; probably less than 2 meters will be available. 83. The mission considered it more realistic under present conditions for Indonesia to attempt in the forthcoming year a level of availability of 6 meters per capita with the likelihood that the same level should be main- tained in the following year. The mission's recommendation of raw materia] * imports in Annex 15 is, therefore, aimed at the 6 meter target. 84. With weaving capacity in excess of requirements, spare parts would be justified only for the spinning and finishing requirements with the emphasis on the spinning group. From the mission's observations, the request of $3,100,000 for textile industry spare parts did not appear to be justified and the mission has recommended $600,000. - 21 - 85. Electricity is generated in a large number of thermal and hydro sta- tions throughout the country. There is a serious shortage of electricity in many areas and in the rural regions the diesel plants operate on2y for part of the day. The officials in this Directorate had a very extensive documentation of the needs for each of the various generating stations. While the mission did not investigate the energy sector in any detail and has consequently not included it in the Annexes, it feels that the statement of needs at $15 million is reasonable. 86. The mission recogni2es that earlier surveys recorded that many of the existing plants are small and that a considerable number are in dis- repair. Those studies pointed out that a broad, long-range program of increased power generation and grid installation was essential for the future development of Indonesia. Such a broad program is outside the scope of the mission, but it should be studied before any further sub- stantial expansion of the power sector is undertaken. 87. The mission adopted a similar attitude toward the production of gas from coke and regards the requested $2,300,000 for this activity as reasonable. ANNE Number Title 1 Summary 2 Transportation - Summary 3 Transportation - Sea Communications 4 Transportation - Railways 5 Transportation - Highways 6 Transportation - Aviation 7 Transportation - Road Transport 8 Agriculture and Estates - Summary 9 Agriculture and Estates - Agriculture 13 Agriculture and Estates - Estates U Industry - Summary 12 Industry - Basic Industry 13 Industry - Light Industry 14 Industry - Chemical Industries 15 Industry - Textiles Anne.x I INDONESEA SMOIARY OF FCMOWED IMPORTS FOR 1967 IN C!RTAIN SECTOR Sector US $ Willion Transport 61e 5 Agriculture and Estates 5401 Industry 183.2 29Bo8 Annex 2 INDONESIA TRANSPORTATION SUMIMARY OF IMPORTS US $ Million Total Needs 1967 Requested Mission Item 1967 and 1968 Requested Recommendations Sea Communications 60.8 38.1 19.1 Railways 70.7 38.7 17.0 Roads 37.5 25.8 4.1 Aviation 49.5 33,1 10.3 Road Transport 25.0 10.0 11.0 L7 6L Annex 3 NDONESIA Page 1 TRANSPORTATION - SEA COMNUNICATION Need 197 in US W000 Item Requested : Recommended Comments by Bank Mission_ A. Docking and Repair Facilities Consideration should be given to purchasing a) 8 floating docks,2000 ton 2.000) 2 500 some second-hand docks of a size suitable for 1 floating dock, 5000 ton 2.500 ,,,he small inter-island ships (largely 500 to 1500 ton DW.) Such small docks should be available in maritime countries where they may have become obsolete because of their small sizes. The advantage would be that they would become available sooner than new docks. Con. s.deration is also being given to wompletinE the new Carya Putra shipbuilding and repair yard but the remaining irwestment needed to an amount of US $11 million is too high for the mission to include it in their recommendations without more detailed studies. b) Workshop facilities: The facilities axnd machinery are admittedly Various types of machinery 1.000 0.200 old but largely operational. Their renewal will have to wait until more funds become available. c) Raw materials and supplies: Ship plates and profiles 1.250 1.800 These materials have to be considered together Other supplies o.960 1.000 with materials requested for the rehabilitation of the fleet. The figures allowed take into account the need for a reasonable stock to be built up. Annex 3 Page 2 B. Fleet rehabilitation (incluaing Spare parts are reconmiex;ed as requested. dredfers) a) Engine spareparts from: 26026~ USA 2.64o 2.64o Japan 0.865 o.865 Netherlands 0.665 o.665 Balgium 0.075 0.075 West Germany 0.950 0.950 Switzerland 0.040 0.040 U.K. 0A470 0d470 Denmark 0.100 0.100 Hungary 0.050 0.050 b) Engine replacements 2.000 0.500 The mission believes that replacement of main engines should wait until later. Allowance is made, however, for a modest amount of auxiliary motors for wooden vessels. c) Ships plates, paints 0.570 -- Included in A, c). C. Rohabilitation of Lighthouses 3.500 2.000 The mission recognizes the priority of this and Marine Safety Equipment item but believes that meeting the needs may be spread over two years. It also does not see why all deliveries should have to come from France as requested. D. Rehabilitation of Port and Cargo Handling Equipment a Water supply installations 3.100 0.500 The mission considers these items less urgent b Electical installati.ons 1.290 0.300 than other needs. c) Cargo handling equipment 1.800 0.400 Cargo handling can still largely be done by the ship's own gear and manual labor. Allowance is made, .however, for some addi- tional fork trucks and mobile cranes for lifts too nleavy to be handled by hand. d) Tugs and water barges 5.000 1.000 Allo-1ance is made only for some se ond-,1and equi xiient. a 4 Annex 3 Page 3 e) Dredges 5.000 1.000 Repair of dredgers is included under fleet rehabilitation. Allowance is made for some second-hand equipment. E. Rehabilitation of Coastal 1.000 1.000 Another amount of 2.i43 is envisaged for 1968. Communication System In this connection, see the comments made in the text on transportation. F. Seatrain Operation 1.300 1.000 This is a new operation of inter-island barge transport. The mission is not yet convinced of its economic advantages as such, but the operation may be useful for river transports, and therefore a reduced allowance is recommended. 38.125 19.055 _= v_ INDONESIA Annex 14 Page 1 TRANSPORTATION-RAILWAYS sieeds 1967 in US $000 Item lR questei Recommendedby Comments Bank Mission A. Annual Requirements a) For track and rolling stock 3.620 3.620 The amount seems somewhat high but a stock has to maintenance be built up. b) Spare parts for Krupp diesel 0.540 0.540) hydraulic locomotives ) These spare parts are urgently needed to repair c) Spare parts for General 0.740 0.740) locomotives presently out of service. Electric and General Motors diesel electric locomotives d) Track liners and railsrw 0.050 0.050) These three items, included in the Railway list machines ) of annual requirements, are as such not annual e) Accounting machines 0.050 0.050) purchases. f) Equipment for traffic 0.250 0.050) department g) Medical services (six port- 0.550 -- Although the mission recognizes the desirability able chest X-ray apparatus) of this equipment, it believes that this is not the time to start this new responsibility for the railways. B. Signalling a) Tools for signalling and 0.245 0.245 communications work shop b) Rehabilitation of electric 0.100 0.100 block system C. Communications a) Radio 0.9140 0.940 The mission mikes the reservation for radio that b) Train and wagon dispatch 1.455 1.455 the need therefor should be reviewed in the light c) Horse telegraphy 0.150 0.150 of the rehabilitation of the countrytstelecommuni d) Network materials 0.430 0.430 cation system as explained in the text. The mission e) Measuring instruments 0.155 0.155 agrees with the need for better control o. train and wagon dispatch. 4 4 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~. Annex .4 Page 2 D. Traction and Workshop a) MRterials and parts 0.500 0.500 b) Shop facilities and 1.500 0.200 Shops are indeed old but most equipment is equipment operational and its modernization should wait. c) Wre¢king crane 0.200 0.200 Consideration may be given to obtaining a second- hand crane. d) Forklifts 0.100 -- e) Rehabilitation and repair 2.000 2.000 The mission recognizes that rail-ferries are of ferry boats important. f) Air brake equipment 0.175 0.175 g) Automatic couplers to 2.450 1.000 Though desirable, the mission considers that replace old types there are more urgent needs. h) 50-350-HP shunting diesels 3.500 -- Although the mission recognizes that the steam i) 45-800-HP mainline diesels 7.240 -- locomotives ar*e far overage (409 out of 947 are j) 10 narrow gauge (o.75M) more than 40 years old) and that there is ample locomotives room for further dieselization, (there are 258 diesel locomotives and 20 more to come end 1966), the mission feels that the purchase of new dssels goes beyond meeting the emergency needs of the railways. E. Bridge Renewal and Strength- 1.600 1.600 The mission agrees that rehabilitation and ening strengthening of bridges deserves high priority. P. Track Renewfal and Strength- The total amount requested for a two-year track ening program is US $17.4 million of which the railways request US $10.2 milllon for the first year. The mission has prorated the amount for rail and fasteners. a) BAllast 1.175 0.400 Largely for 15 new stonecrushers. The mission believes that for one more year the cid-fashioned method of stone crusiiink will have to be continued. and has made alloca-rc e ftr only 4 crushers. a A Annex 4 Page 3 b) Rails and fasteners, tools, 7.250 1.500 The mission believes that the purchase of large etc. amounts of new rail is not justified until the production of sleepers has started, which will not be the case for some time. Therefore, only a modest amount for the most urgent needs is in- cluded in the recommendations for 1967, largely for turnouts and points. c) Concrete sleeper plant 0.100 0.100 Materials for one year are recommended it this materials for three years 1.590 0.600 time. production d) Sawmill and wood preserva- Not The mission recommends serious consideration of tion plant for softwood requested 0.200 using also preserved soft wood sleepers, sleepers particularly for switches and crossings. 38.655 17.000 co_ _2m INDONESIA Annex 5 Page 1 TRMXSPORTATION - HIGHWAYS Item Reeds 1967 in US $000 Comments Requested Recommended by Bank Mission A. Spare parts for Road Equipment a) Equipment operated by Highway Department, from: usA o.o65 o.o65 Japan 0.386 0.386 Germany 0.270 0.270 U.K. 0.241 0.241 The U.K. engine parts are for Perkins motors Sub-total 0.962 O. used in Yugoslav equipment. b) Heavy equipment operated by the Public Works Central Equipment Department in behalf of Highway projects, from: USA 0.950 0.950 Of this, US $0.700 million is already included in a list presented earlier to the MSA Govern- Japan o.250 0.250 ment. Sub-total 1.200 1.200 c) equipment needed to complement Repairing only the exioting equipment will result existing equipment so as to 8.225 1.000 in a short fall of certain types of equipment make a balanced equipment pool which will mean that the existing equipment can- not be fully and efficiently used. Therefore, some additional new equipment would be justified. However, as explained in the text, the mission believes that before undertaking large road re- habilitation programs, which it recommends to be carried out by contractors, emphasis should be on emergency jobs. Therefore, only a small amount is recommended for the nost urgently needed new equipment. Annex 5 Page 2 d) Workshop machinery, 0.590 0.100 The existing shops are largely operational. equipment and tools What is most needed are more and better shops in the vazious districts, to be in- cluded in an overall plan. e) Asphalt imports supplement 4.500 0.500 The amount requested (for 100,000 tons) is based on the planned highway rehabilitation program. The local production of about 55,000 ton in 1966 can be raised in 1967 to some 85,000 ton. Moreover a plant is under con- struction on Sumatra which is to produce 60,000 ton. This total should be largely sufficient for the emergency program. f) Buton natural asphalt 10.000 __ In 1966, about 30,000 ton natural asphalt production plant expansion (included in the above figures) is to be produced on the island of Buton. A plan exists to raise the production to 200,000 ton. The plan may well be worth pursuing, but its realization and its cost go beyond covering the immediate needs for spare parts and raw materials. g) Bridge material 0.300 0.300 Strengther1ng of bridges to modern standards deserves high priority. INDONESIAL 1uxnx 6 Page 1 TRANSPORTATION - AVIATION Needs 1967 in US $000 Item Recommended by Comments Requested BPnk Mission A. Garuda Indonesian Airways a) Spare parts for: Dakotas 1.390 The total amount of a) - O), US$ 5.5 million Convairs (prop) 1.720 has already been requested from the US Govern- Blectras 0.565 ment. Since only the Convair 990 A's are used Convairs 990A jets) 0.250 in international traffic, emphasis is rightly on domestic traffic. To the extent that the maintenance abroad of the recently received DC 8 is included in c), the mission strongly recommends to either sell this plane, or charter it out to a foreign airline, since Garuda's international activities need not be extended at this time. b) Raw materials and standard parts 1.075 c) Paintenance services abroad 0.500 Sub-total 5.500 O.500 d) Purchase of new Fokker 3.500 -- The amount listed as requested is a pro-rating Friendship planes of an amount of US $17.- for the purchase of 10 planes, two to be delivered in 1967 and eight in 1968. Though replacement of the old Dakotas and Convairs by modern planes for dcmestic aviation is justified and deserves high priority their purchase (already covered by a contract with the supplier) is outside the scope of the mission's task. Annex 6 Page 2 B. Mferati Nusantara (omestic feederlines) Spare parts 0.620 0.620 The request is for two years; the mission re- commends meetirg the request in one year. C. Non-Public Aircraft, operated The need for this item results to a considerable for various Government Agencies extent from the unsatisfactory service of the public and enterprises carriers, and should reduce if and when the latter's Spare parts 2.133 service improves Therefore, expenditures for this Materials 0.375 item should be kept to a minimum since the military Spares for maintenance shops 1.500 civic mission may be able to assist in meeting these Sub-total TMUg- 1=0 needs. D. Airr>ort Kemayoran (Djakarta) a) Spare parts for airfield 0.091 0.091 The mission recommends against the Airport construction equipment authority carrying out airfield construction with its own forces and equipment. The amount requested is recommended to the extent that the equipment may also be needed fo. airfield maintenance. b) Fire fighting equipment 0.066 0.066 The amount requested is largely for chemicals and parts for small hand equipment. c) Telecommunication 0.010 0.010 Tubes and parts for existing equipment. d) Generators, etc. _0.150 0.150 Materials and power supply for airfield illumination. Sub-total 0.31 0.317 E. Airfields (excluding Kemayoran) a) Telecommunications 8.023 0.500 The request is largely for new installations rather than repair of existing ones. Whereas the mission recognizes the importance of domestic aviation and agrees that improved domestic airfields and installa- tions therefor deaerve high priority, the request falls outside tne scope of the mission's task. Only some allowance for spare parts of existing in- stallations is made. Annex 6 Page 3 b) Aeronautical InfonmatiOn 0.080 0.080 Service c) Fire fighting equipment 1.106 0.400 The request includes 10 new crash trucks and 10 new rescue vehicles for a total amount of US $0.650 mil]in. Whilst recognizing the desira- bility of such equipment, this also falls outside the scope of the wission's task. The rest is largely for chemicals for fire fighting equipment and some small eqiipment. d) Spares for heavy equipment 0.180 0.180 for airfield maintenance New tractors and trucks for 0.305 --- same e) Electric power supply and $.000 0.500 Comment on this item is the same as for a) airfield lighting systems f) Aviation medicine 0.005 0.005 g) Training 2.263 -- The mission believes t at training may be arranged with foreign countries for the time being. F. Meteorological and Geophysic An amount for the neees for 1967 (unknown to the Se-rvi-ces mission) has bee.n reqihsted from the US Government. G. Aviation Services for West Irian a) spare parts for small aircraft 0.380 0.380 b) airfields and navigational This item is !,rgely for new facilities rather aids 1.541 0.500 than for rehaWilitation of existing ones. Annex 6 Page 4 c) i:eteorological services 0.109 0.109 These services are also of importance to overflying aircraft. d) Operation "Wamena"t 0.200 0.200 Completion of airstrip for the capital of the Sub-total 2.e30 1.I1 Central 'ighlands to accammodate D.C. 3 aircraft. 33.I37 1I729r Annex 7 IfDBNESIA Page 1 TRANSPORTATION - ROAD TRANSPORT Items Reqested Bank Mision Commenus A. Spare parts for exit ng no speci- The Government estimates that 40,000 non-operational trucks, busses and fic request trucks/busses and 38,000 passenger cars are repair- passenger cars, Wncluding is made, but able if spare parts bec 2me available. It is 10% for tools and shop an amount of further estimated that therefor an amount of US $ 20 equipment) US $ 10 mil- million would be needed, and that half of this would be lion is men- provided through free import channels, the balance to tioned for be provided by the Government. Finally, it is assumed the needs for that about 75% of all road vehicles are US made, the both parts and balance European, Australian and Japanese. The mission tires in 1967 is not in a position to express an opinion on rumors that considerable amounts of spare parts are still held in the country for investment purposes. It is also assumed that re-establishing relations with Malaya and Singapore will cause more spare parts to enter the country. Therefore, the mission recommends that amounts for spare parts be released only gradually and that developments in this sector be followed closely. Another reason for this suggestion is that nearly all road vehicles are privately owmed. a) for vehiclesother than those listed under b) for USA makes 3,500 Of which US $1.8 million is already requested from US for non-USA makes 1.500 Government. Annex 7 Page 2 b) for city buses, both 1.000 Mass transportation in Djakarta has nearly privately and munici- disappeared since only 20% of the city buses pality owned and operated are operational. The same is likely to be true in other cities. The mission believes that re-establishing mass transportation should be given high priority. B. Tires see above 5.000 Annual consumption of a fleet of about 140,000 passenger cars, 75,000 trucks, 20,000 buses and 200,000 motorcycles, if fully operational, would be in the order of magnitude of some I1,400,000 tires, at a value of some US $65 mil- lion. Domestic production, if working at a maximum capacity is about 700,000 tires. Thus with a fully operational fleet, the annual import needs would be some US $30 to 35 million. The fleet is, however, only some 40%(trucks and buses) to 60% (passenger cars) operational, and it will take a few years before all vehicles are operational again. For the same reasons as mentioned for spare parts, the mission recowmends to release amounts for tires only gradually, and to watch developments closely. In the light of the above, it is obvious that emphasis should be puton expansion of domestic production. i0.000 11.000 =_ AI Annex 8 INWNESIA AGRICULTURE AND ESTATES SUMIARY OF IMPORTS 1967 US $ Million Needs Mission Item Requested Recommendations Fertilizer Agriculture 30.8 21.8 Estates 24.5 7.0 Insecticides and Chemicals Agricalture 17.5 12.0 Estates 2.0 2.0 Other Agriculture 14.5 6.0 Estates 17.5 _.3 106.6 541 INDONESIA Annex 9 Page 1 AGRICULTUFE AND ESTATES I. I1ISTFY CO AORIOULTURE Needs 1967 in US e000 Mission Item Requested Recommendations Comments FERTILIZER Padi (Off Season May-Oct.) The mission regards provision of fertilizer, N 50,000 tons 5,000 2,50O together with necessary sprayers and insecti- P 50,0O tons 4,000 2,000 cides, as an item of top priority in the re- habilitation of the economy. As discussed in Padi (Main Season Nov.-April) the text of the agricultural section, if N 100,000 tons 10,000 8,000 approximately US $24 million were invested the P 100,000 tons 8,000 6,400 import value of additional rice production is valued at US $140 million. Corn (Off Season) Reductions have been made in the amounts pro- N 3,600 tons 360 270 posed as the mission feels that the rate of P 2,400 tons 192 th5 ex_ansion of rjsrned rro-rami cannot be K 1,200 tons 60 45 achieved in 1967. Corn (Main Season) N 2.400 tons 240 180 P 1,600 tons 128 100 K 800 tons 40 30 Fertilizer has been calculated in terms of actual fertilizer rather than in nutrient elements in order that the storage and transportation requirements can be more clearlj seen. For purposes of calculation it has been assumed that the nitrogenous fertilizer (N) would be imported as urea; phosphatic fertilizer (P) would be imported as double super phosphate and the potassic fertilizer (K) as muriate of potash. Various other compound fertilizers could, of course, be substituted, in which case overall costs and tonnage involved woizld be of similar magnitudes. Annex 9 Page 2 Miscellaneous horticultural With the end of confrontation the profitable crops, vegetables, etc. vegetable trade can be restarted with Singa- (Off Season) pore. N 6,000 tons 600 450 P 4p,000 tons 320 240 K 4,000 tons 200 150 (Main Season) N 9,000 tons 900 675 P 6,000 tons 48o 360 K 6,ooo tons 30 30,82 225 21 INSECTICIDES The mission believes that if fertilizer is applied to improved padi varieties it is Padi 12,500 8,000 essential to have adequate pest and disease control to realize the increased yield poten- Other Crops 5,000 _ 4_,000 tial. The amounts requested,however,are too 17,500 12,000 high in relation to previous use levels by the farmers and, in the opinion of the mission, cannot be achieved in 196?7. MACHINERY 300 Jeeps 990 - It should be possible to mobilize militaxy vehicles for productive purposes. 180,000 Sprayers 5,400 1,000 Sprayers are essential but total excessive for above reasons. Spares should be imported to repair existing sprayers. Spares - 250 Rice Mills 400 400 Total loss of rice bran (animal feed) occurs 6,790 i,650 following hand threshing and loss of quality due to broken grains. Improved milling techniques will reduce r-Lse loasec. Annex 9 Page 3 EXTENSION SERVICE 326 jeeps 978 _ It should be possible to mobilize military vehicles for productive purposes. 26 Mobile Units 104 50 1,200 Bicycles 45 45 75 Marine Diesels 15 hp 150 ) 10 Marine Diesels 20 hp 20 )100 1 Marine Diesel 25 hp 2 _29_ 9 EQUIPTMENT Projectors, tapes, etc. 355 150 The mission believes that only the minimum equipment requirements should be covered during the stabilization period. 'The figures requested include necessary expansion of equip- ment but during this period it should be delayed. TRAINING CENTERS Miscellaneous equipment 916 400 Cut back to include minimum rehabilitation 1,271 3rO needs only. FORESTRY Existing equipment can be repaired given .Exploitation adequate spares. Road building units, tugboats, etc. 900 500 Spares - 100 Annex 9 Page 4 Processing Very necessary to maintain and increase sawmilling, etc. 875 875 timber exports as well as for local use. Staff training 200 100 Reduced by the mission to cover minimal requirements only. Disease control Minimal program only covered. Reforestation, etc. 550 ___ 350 __925 2,525 1,925 VETERINARY Vaccines and Cattle diseases resultAed in loss of 10,000 miscellaneous equipment 750 T 750 head in Bali alone last season. 750 73T Preventive inoculation of livestock is regarded by the mission as an essential insurance. INLAND FISHERIES Chemicals for weed control Present production is of the order of Water pumps, nets, etc. 1,780 o 900 400,000 tons of fish annually, which 1.780 900 forms a valuable part of the local diet. Armex 10 Page 1 INDOESIA AGRICULTURE AND ESTATES II. MINISTRY OF ESTATE5S Needs 1967 in US $000 Requested (Including Mission Recommen- item Local Production) dations (Imports) Comments FERTILIZER Y/ 280,000 tons 24,50C 7,000 There are over 1,000 estates in both the pub- oo 5007,000 lic and private sectors in Indonesia covering some 825,000 hectares. Crops include rubber, oil palm, sugar cane, tobacco, tea, coffee, cocoa, fibers and quinine. All these crops give economic responses to fertilizer under Indo- nesian conditions. In order to maximize pro- duction (mainly exported) fertilizer should be readily available. The mission believes that the total requested is appropriate to the area planted. However, in view of the foreign ex- change regulations currently in force, which provide little incentive for increasing pro- duction by applying more fertilizer, it is un- likely that the private sector estates would take up much fertilizer even if it were avail- able and in view of this the request has been reduced. 1 Local production of 100,000 tons of urea has been assumed for purposes of calcula- tion to be absorbed entirely in the Estates sector. Annex 10 Page 2 CHEMCAIS for processing, weed and The mission believes that chemicals for disease control processing are necessary to maintain export Formic acid - 1,900 tons 515 515 levels. Some of the weed control chemicals Liquid ammonia - 193 tons 170 170 currently utilized are specifically formu- Roll sulphur - 3,000 tons 225 225 lated to reduce labor inputs in application. Other chemicals 1,125 1,125 Labor rates in Indonesia are comparatively 2,035 2,035 low and it may be that other chemicals, the application of which require higher labor inputs, would be more economic. This should be investigated. The request has not been reduced as there is a tremendous amount of delayed maintenance to be cleared up. TEPA CHESTS 625,000 pieces 1,700 1,700 The mission had no opportunity to check the 1,706 1,700 locally produced plywood situation, but was informed by the M4inistry of Estates (tea sec- tion) that chests manufactured from local ply- wood did not have the necessary resilience and considerable lceses resulted from spillage and spoilage during transshipment. This may be an inherent factor of the local woods or, more probably, due to the manufacturing processes. This should be examined, but it is unlikely that the present plywood factories could handle the demand in 1967. Annex 10 Page 3 JUTE SACKS 2,ti30, 00 1,140 1,140 These are required for the handling of sugar, 1,144 1,140 coffee and cocoa. Possibility of bulk handling of sugar to principal distribution centers should be examined. This would not, however, affect the need in 1967. Local factories can- not, at this stage, manufacture sufficient sacks to meet this need, their production being readily absorbed by the requirements of trans- portation of rice. TRANSPORTATION REQUIEMMENTS 207 Trucks 828 ) The mission believes that much of the trans- 154 Jeeps 508 ) portation available on the Estates can be re- 30 Pickups 78 ) 250 habilitated and that, at this critical 13 Motorcycles 4 ) time, replacement should be kept to an absolute 231 Tractors 808 300 minimum. Additional spare parts should be im- Spares 200 2, 800 ported to facilitate rehabilitation. 2,L&26 1,350 FACTORIES Mis eMlaneous factory spares 605 605 These are necessary to maintain the level of ex- Sugar factories 5,000 - ports. There is considerable pressure to modern- Oil palm factories 1,000 - ize existing factories but to date no production Rubber factories 5,400 500 has been lost due to lack of processing facili- 12,.005 105 ties. The mission believes that the modernization program for the factories can be delayed till such time as foreign exchange is more readily available. The proposed expansion of sugar fac- tories is unnecessary as Indonesia is currently exporting her surplus sugar (50,000 tons per annum) at prices of about US $32 per ton f.o.b. This price level is well below cost of produc- tion. US $500,000 is recommended for 2 hevea- crumb rubber factories to take account of new plantings coming into tapping in 1966-1968. Annex 11 INDONESIA INDUSTRY suwARY OF IMeoPTS 1967 US $ M4illion Needs Mission Item Requested Recommendations Basic Industry 39%0 20.0 Light Industry 160.0 53.4 Chemical Industries 13.7 16eO Textile Industries 138,2 93.8 M35,9 INDMNESIA Annex 12 IND'USTRY Page 1 DEPARTMENT OF BASIC, IIGHT INDUSTRIES AND ENERGY DIRECTORATE GENERAL OF BASIC IMDUSTTR IMPORT REQUIREbTS - PRIVATELY WNED CORPORATIONS Needs 1967 in US $000 Company or Original Revised Mission Industry Products Request Request Recommendations Pertjetakan Printing 200 200 Ventil Tire Valves 300 300 Mesin dan Logam Machine Shops 9,000 4,500 Various Battery 5,200 2,600 Pidjar Light Bulbs 300 300 Various Electrical 2,100 1,050 Various Radio and Tele- 1,900 900 vision 19,000 t*9kid 3FfuG Amex 12 Page 2 INDUSTRY ag DEPARTMEWT OF BASIC, LIGHT INDUSTRIES AND ENERGY DIRECTORATE GENERAL OF BASIC INDUSTRY DIPORT REQUIREMENTS - STATE CORPORATIONS Needs 1967 in US $000 Item Original Revised Mission Number Company Products Request Request Recommendations 1 Barata Sugar Mills; Machinery; 3,420 2,680 Steel Buildings; Bolts, Nuts, Rivets; Diesel Assembly 2 Bisma Diesel Assembly; Con- 1,000 780 crete Mixer; Steel Buildings; Machinery; Tanks 3 Boma Freight Cars; Passenger 1,960 1,520 Cars; Gas Engines; Steel Buildings 4 Gaja Truck Assenbly; Bus 3,280 0 Assembly 5 Indra Sugar Mills; Pumps; Com- 1,960 1,520 pressors; Hoists; Steel Buildings; Machinery; Diesel Assembly; Oxygen Plants; Cement Plants Annex 12 Page 3 6 Metrika Transformers; Switch- 1,820 1,420 boards; Motors; Genera- tors; Insulation; Batteries 7 Ralin Bulbs; Radio; Television; 3,940 1,000 Armatures; Telecommunica- tions 8 Sabang Steel Buildings; Tanks; 2,620 1,000 Merauka Machinery; Castings; Looms; Lathes 9 Coke for 120 120 Industries 1,2,3,5, 6 10,060 . 0,04 Annex 13 Page 1 INDUSTRY DEPARTMENT OF BASIC, IZGHT INDUSTRIES AND ENERGY DIRECTORATE GENERAL OF IIGHT INDUSTRY 3IWR REQUIsMENS Needs 1967 in US $000 Highest ____ ___ ____ ___ ____ ___ ____ ___ ___Amnual item Name of Originai Revised Mission Allocation Number Industry Request Request Recommendations 1961-1965 A. Health Group Soap 2,110 2,110 1,200 924 Toothpaste 1,400 850 600 576 Toothbrushes 460 300 300 318 Cosmetics 890 600 200 164 Camphor 200 100 50 36 Glucose 20 10 10 - Ointment and Others 220 100 100 - B. Food Group Coconut Oil 1,000 300 300 465 Fraving Oil/ Margarine 1,800 1,000 1,000 1,020 Cigarettes 9,100 6,000 3,000 2,100 Kretek Cigarettes 7,000 4,000 2,000 1,552 Canning 1,920 1,100 1,100 845 Ice 1,000 200 200 418 Beer 750 500 600 638 Lemonade/Syrup 500 300 300 222 Biscuit 500 250 100 60 Candy/Chocolate 300 150 50 17 Tea 120 100 120 45 Strong Drink 150 - - _ rigarr 60 20 20 48 Anaex 13 Page 2 C. Education Group Pencils 450 300 250 196 Writing Books 750 550 100 1 Writing Ink 170 120 30 2 Sport Articles 220 150 100 38 Gramophone Records 150 100 100 135 D. Transportation Group Bicycle Assembly 6,520 2,500 2,000 782 Bicycle Tires 3,300 2,000 1,500 1,240 Bicycle Parts 1,850 1,000 1,000 510 Bus and Truck Bodies 700 300 300 120 E. Building M4aterials Group Paint 4,750 2,000 1,000 614 Nails, Handles/ Hinges 9,890 4,000 2,500 2,380 Eternit 1,340 600 500 596 Saws 500 200 200 204 Tile 480 200 200 222 Wire 1,900 500 500 274 Steel Fabrication 2,600 1,000 800 420 F. Other Industry Group Agricultural Tools 2,900 1,700 1,700 - Machines/Workshop 5,000 2,000 1,000 270 Tannery 2,200 170 1,200 717 Leather Shoes/ Sandals 1,400 700 500 210 Rubber Shoes/ Sandals 650 650 600 535 Printing 33,000 6,0oo 3,000 2,080 Printing Ink 1,800 900 650 597 Stereotype Block 200 100 80 44 Stamp M4etal 130 80 80 116 Container Printing 660 300 150 12 Carbon Paper/Stencil Sheets 670 3h0 350 336 Paper/Cartons 520 300 300 262 Annex 13 Page 3 Hatches 800 500 500 865 Abrasive 150 50 50 70 Aluminum Rubber Cups/Tubs 1,040 500 750 53 Aluminum House- hold Wares 2,670 1,000 1,000 782 Enamel 3,110 1,000 1,000 835 Hand Mangel for Rubber Industry 1,000 300 300 _ Glass 1,340 680 500 245 Ceramic/ Earthenware 300 200 200 136 Fire-Extinguishers 200 100 100 9 Tubes 270 100 100 50 Furniture/Beds 480 150 150 333 Leather Trunks/Bags 320 200 200 2£ Rubber Goods 1,340 700 700 380 Umbrellas 110 50 50 15 Musical Instruments 320 150 100 25 Steel Safes 670 300 200 200 Thermoses 200 100 100 33 Wall Lamp/Hanging Lamps 300 200 200 242 Balances 440 200 200 22 Trunks 210 200 100 21 Zipfasteners 890 580 580 269 Press Buttons 170 100 100 20 Essences 930 400 400 200 Washing Blue 200 50 50 16 Dye 100 50 50 23 Hats 50 20 20 Plastic Sheets/ Plastic Wares 1,000 1,000 1,000 1,701 Shoe Polish 200 100 100 611 Foundry 920 00 500 Galvanizing 400 200 200 22 Armex 13 Page 4 Toys 110 50 25 3 Cigarette Paper Booklets 1450 200 200 Cases/Cargo Loads 250 50 50 3 Triplex 50 20 20 Brick/Roof Tile 100 50 50 5 Remedy Against Mosquitos 30 10 10 Dry Batteries 1,500 1,500 1,500 200 Mirrors 360 100 100 22 Containers Industry 7,800 3,000 3,000 5,410 Mantle for Gaslamps 200 50 50 _ G. Spare Parts 14,500 7,000 7,000 159,730 ,70,000 53,445 35207 Rou:nded: 160, 000 ALnnex 14 Page 1 INDONESIA INDUSTRY DEPARTMENT OF BASIC LIGHT INDUSTRIES AND ENERGY DIRECTORATE GENERAL OF CITMICAL INDUSTRIES PRODUCTJDN CAPACITY, TARGRTS AND INPCBT REQUIRENENTS BY INDUSTRY GRCUP --eeds J-197 nUS Tam Number of Target Mission Product Companies Capacity 1967-1968 Requested Recommendations Cement 3 630,000 T/l 48L0,OOO T/! 2,825 2,825 Paper 5 35,700 T/Y 20,250 T/Y 2,400 2,400 Glass and Bottles 1 14,400 T/Y 12,000 T/Y 470 470 Tires 3 Truck-Sedan 735,000 Pcs./Y 520,000 Pcs./Y ) 5,225 7,,230 Bicycle 5,100,000 Pcs./Y 3,500,000 Pcs./Y ) Salt 1 300,000 T/! 250,000 T/Y 825 825 Caustic 1 3,000 T/Y 3,000 T/Y) 200 200 Chlorine 1,000 T/Y) Urea 1 100,000 T/! 100,000 T/Y 1,300 1,600 Oxygen Several 4,000,000 ciM 3,000,000 CuHI! 300 300 Rayon Pilot _ 300 T/Y 150 16,00-0 InMONESIA Arnex 114 Page 2 INDUSTRY DEPARTENT OF BASIC, LTGHT INDUSTRIFES AND ENERGY DIRECTORATE OF CHEMICAL INDUSTRISE IMPORT REQUIREMENTS BY CATEGORY BY PLANT Needs 1967 in US $000 faw- MMATera Uperat4ng spare Industry Company Name Value Supplies Parts Total Requested Cement Gresik Kraft 500 445 300 Gypsum 255 1,500 Padang Kraft 200 160 350 GZpeum 90 800 Tonasa Kraft 185 167 814 Gypsum 89 525 Paper LetJes Cellulose 225 100 25 Chemicals 250 600 Blabak Cellulose 225 75 50 Chemicals 50 400 Pandalarang Cellulose 175 100 25 Chemicals 300 600 P. Siantar Cellulose 240 25 25 Chemicals 10 300 Gowa Chemicals 350 75 75 500 Glass Iglas Chemicals 130 200 40 4,70 Annex 1l4 Page 3 Tires Intirub Tire Cord ) Cotton Duck ) 500 75 100 Chemicals ) 125 800 Gelora Yuda Tire Cord ) 4 000 Chemicals ) s 000 sD Ban Palembang Tire Cord ) 42525 Chemicals ) 425 Salt Garam Aluminum Rondels 200 25 600 825 Caustic Waru Alum 5 175 20 200 Urea Pusri Kraft 500 150 650 l10-0 Oxygen Various Chemicals 25 150 1250 Rayon - 150 - 150 13,695 ir,rex 15 INDONES I& INDUSTRY DEPARTT OF TEIlES D HOE M nDUSTfaEs DIRECMORTE GENERA OF TEXTI:LE IMPORT ESQUI1tEENTS Needs 1967 in US $000 Nission Mission IndustrY Item Volme Requested Recomendations Requested Recommendations Textiles Cotton 45,000 tons 33,750 tons 31,500 22,625 Ramd 350 tons 262 tons 300 225 Raw Staple Fiber 160 tons 120 tons 100 75 Yarn 41.,000,000 bales 3,000,000 bales 94&,700 63,925 Dye Stuffs 1,500 tons 1,125 tons 4,700 3,525 Chemicals 7,800 tons 5,850 tons 1,800 1,350 Cambrics 6,000,000 M 4,,500, 000 M 2,000 1,500 Spare Parts - 3,100 600 Sewing Yarn - -- -=1 93 825 .~ &_00