Executive summary The General Tyre and Rubber Company of Pakistan Limited (Gentipak) is Pakistans premier industry. It was established in 1963 by General Tire USA and has been in production since 1964. Gentipak has a Technical Services Agreement (TSA) with CONTINENTAL AG (Germanys largest tyre manufacturer) which enables it to produce tyres of GENERAL brand and provides the latest technology for production of tyres based on Continentals, R&D. The Plant and the Offices, are located in suburb of Karachi. Initial production capacity was only 120,000 tyres per annum but is now around 2,000,000 tyres per annum. Our plant is constantly upgraded and is equipped with the most modern technology in tyre manufacturing. For fulfilling our vision and demand of the day 2,000,000 tyres we set meetings to seek how much is beneficial to import raw material of Natural Rubber from Indonesia we go through term and condition we find that importing from Indonesia is easy and terms and conditions are reasonable Vision To be the leader in tyre technology by building the Companys image through quality improvement, competitive prices, customers satisfaction and meeting social obligations. With regards Students of MBA(B&F)3rd

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CONTENTS Titles page no

1. Indonesia3 2. Natural Rubber.3 3. Natural Rubber in tires4 4. PEST of Indonesia for Rubber industry..5-8 5. Rubber Market8 6. consumption10 7. trade flows12 8. Marketing chain...14 9. Export Regulation17 10. Methods of Payments...17 11. Custom taxation...18 12. international transportation..18 13. useful information19 14. Reference..21

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Indonesia Sumatra is the chief natural rubber area. Significant further cultivation districts are located in western and central Kalimantan. Unlike Malaysia, smallholders are largely confined to remote areas, especially in the key NR growing area of northern Sumatra. There is a persistence of traditional production technologies, as reflected in relatively low yields. The marketing of smallholders' rubber is still largely carried out through a chain of dealers who often enjoy monopsonistic positions vis--vis individual smallholders. Efforts have nonetheless been made to group together smallholdings. For example, under the Nucleus Estate Scheme smallholders were provided with small plots of high yielding tree crops. Participating farmers in a determined location shared the benefits of centralised technological and managerial assistance. Indonesian estates include large publicly owned plantations and private estates. As in Malaysia, most estates also grow oil palm and other crops. Although increasing involvement in downstream rubber processing, there is still relatively little rubber goods manufacturing (dominated by Bridgestone and Goodyear). Plantations in Indonesia

Source: Guthrie's corporate website

Uses The main uses of NR

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Because of its elasticity, resilience, and toughness, natural rubber (NR) is the basic constituent of many products used in the transportation, industrial, consumer, hygienic and medical sectors. NR major end uses

Source: UNCTAD secretariat Growth in demand for certain end products conventionally using rubber does not necessarily translates into growth of NR consumption, owing to competition from synthetic rubber (SR) and new materials. NR and SR in tires Despite the competition of synthetic compounds, natural rubber continues to hold an important place in tire consumption. In particular, its superior tear strength and excellent resistance to heat up makes it better suited for high-performance tires used on racing cars, trucks and buses, and aircraft. In these applications, the potential for switching from natural to synthetic rubber is quite limited, given the clear-cut technological advantages to natural rubber. Breakdown by major sectors (NR and SR)

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Source: UNCTAD secretariat (Data: International Rubber Study Group, Statistical Bulletin) Separate rubber compounds are used for different parts of the tire (on the weighted distribution of the various components of a passenger tires, please refer to this section of Michelin's corporate site; also, the table below). Generally, the larger the tire the greater the share of natural rubber. The table below refers to relatively small-size truck tires. Source: Rubber Manufacturers Association (RMA) Latex products As for high-performance tires, technical factors (performance needs of the products and process technology) also constrain the ease of substituting SR for NR in the latex product market. For example, because it is waterproof (whereas some synthetics absorb water), NR latex is best suited for use in surgical and medical examination gloves and in condoms. NR latex is possibly the best protection against pathogens such as HIV. Latex products include, inter alia, condoms, gloves, threads, adhesives, and moulded foams. They found applications, including specialty applications, in different sectors, among which is the medical and hygiene sector. . Is a Truly Sustainable Indonesian Rubber Industry Possible?Adapted from Zen Zahari's PhD Thesis by Tim Frodsham

Contents1. 2. 3. 4. Economic Issues

Environmental Issues

Social and Political Aspects

Conclusion

This is a brief overview of capability for sustainability in the Indonesian rubber industry. It examines upstream components (extraction, collection, primary processing) and downstream components (secondary processing, transport and marketing). It explores a variety of approaches aimed at improving the longer term sustainability and efficiency of the role of the rubber industry in the presently somewhat troubled economy of this largest country of Southeast Asia. In particular, the question is asked: Can a new approach to integrate an equation of solutions to upstream and downstream problems in such a way that political, socio-economic and environmental problems in the Indonesian natural rubber industry can be treated simultaneously? As we shall see, a sustainable outcome cannot occur without substantial political change, both in the higher echelons of Government policy making and implementation and at grass roots village community levels. The following paper firstly examines the economic role of rubber to the national economy, then explores the impacts of the natural rubber industry on the environment. It then looks at the current social and political aspects of the industry as it has so far developed. Finally, it will focus on the critical need for a new

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approach in reducing poverty, while at the same time reducing environmental impacts of the industry. 1.0 Economic Issues The Indonesian natural rubber industry has always had intertwining connections between the environment, the economy and the community. The economic role of rubber in the Indonesian national economy and its problems in the social sphere cannot be overlooked. Indonesia is the second largest rubber producer in the world after Thailand. In 1994 it produced 1.4 million metric tonnes, comprising 24 per cent of world production. 73 percent of the total production comes from smallholders, such as the ones pictured in the opposite photo of a 'mini-crepe' plant. The rubber industry is a very important source of export production and provides direct revenue for up to 12 million people, including smallholders and companies (private and Government estates). As the New Order Indonesian Government's industrialisation program has developed since 1966, natural rubber production methods have concurrently incurred great environmental and social costs; in the race to develop and diversify a wider manufacturing base in less labour intensive, sophisticated high technology industries, natural rubber and other agro-economic systems were neglected and subsequently lost competitiveness in regional and global markets. 2.0 Environmental Issues Most smallholders live on a subsistence income and their activities are mostly preoccupied with surviving day to day life, making it difficult (but not impossible) for them to improve the sustainability of rubber farming practices. Their actions, as well as other downstream activities not of their own making have led to land degradation and reduced resources (soil, forest, air and water). This process is intensified each year during end-of-dry-season burn offs to expand plantation areas. Denuded forests are replaced by Alang-alang (Imperata cylindrica) grassland, which is difficult to turn into productive secondary forest, and is mostly useless for animal fodder. Untreated effluents from rubber processing plants also pollute rivers, often reducing water quality to undrinkable standards. The impact of large scale slash and burn techniques practiced by both subsistence smallholders and large plantation owners on air pollution and human health was graphically portrayed in 1997's unprecedented forest fire and smoke haze disaster that systemically affected the entire Southeast Asian region. The direct environmental and economic impacts were all pervasive: a large loss of biodiversity, loss of more than 90 per cent of the natural carbon stock and subsequent contribution to climate change, degradation of soil resources through erosion of treeless gradients, emergence of new pathogenic diseases previously encapsulated within isolated

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tracts of now burnt forest, drastic increases in respiratory diseases from smoke inhalation; consequent loss of human productivity through illness, and loss of revenues from a disheartened tourism sector was observed in the region during the uncontrollable plantation fires of 1997's dry season. Revision of traditional burning practices to clear land severely need to be re-evaluated. 3.0 Social and Political Aspects At present, subsistence level smallholders have little economic incentive to improve their product quality. Their bargaining power is very low. Intermediate traders who determine the smallholders' rubber quality and its relative price, also have a double role to provide basic food commodities for the continuation of the smallholders' often marginal existence. Smallholders often leave contaminants in unrefined crumb rubber so as to be paid more on the weight of their product. Hence a socio-economic power imbalance which affects rubber quality exists here. A key mechanism to the solution for this may be in providing low interest loans to allow smallholders to set up small companies, which could act as trading houses (with inbuilt quality assurance), thereby bypassing the need for intermediate traders. Another option is to provide a more regulated pricing system for rubber quality at the village level, with financial inducements such as tax concessions. Indonesian Government policymakers can take the lead with the appropriate action for this situation. Scarcity of arable land other than that used for expanding rubber plantations triggers inflation of land prices, removing the possibility of ownership of arable land from all but an elite few. Trends indicate that much of the land area formerly given to food crops for villages has now been converted to cash crops (rubber and palm oil) for local and regional cliques. This hacienda style trend of geo-economic marginalisation is disturbing as an issue of sustainability; making local food production for village communities an emergently critical issue. Local self-sufficiency in food production is a sustainability criteria that is critically imperative to socio-economic cohesion. It is now evident that Indonesia has been experiencing some of its worst food shortages in decades. Many people in rural areas are living on diets only marginally meeting World Health Organisation (WHO) standards for adequate caloric intake, some are in grave danger of famine if 1998's unusually parched dry season is not relieved soon by sufficient rain. In most areas there are no reserve supplies of rice or other dietary staples. Riots occurring in Jakarta and other large Indonesian cities are not only attended by those with urban concerns. Also present are the empty stomachs of those transient sharecroppers and rubber tappers whose uprooted concerns are violently expressed in their demonstrations for change to help end the hunger. Genuine reforms in land and other resource tenure on the part of the Government may help to end much social unrest amongst the wider community of rubber tappers. 4.0 Conclusion There can also be a wide range of potential benefits from new and appropriate technologies, both upstream and downstream. Improved efficiency in terms of arable land use for rubber cultivation, waste management and energy use will be net potential benefits. However, considerable resources need to be invested in training and educating smallholders and plantation employees in the use of practices and technology needed for 7

change towards sustainability. Long term sustainablity of current slash and burn techniques need to be reviewed. More stringent regulations on the use of biocides and fertilizers is also essential. Legal frameworks have been set up to respond this problem in relation to pollution, but the rubber industry does not yet comply with the existing regulations. Moreover, a grass roots embrace of appropriate practices for sustainability in the Indonesian rubber industry will not occur unless self-sufficiency in local food production needs are not concurrently met with substantial re-balances of inequity in land distribution and tenure. A simultaneous 'top-down 'and 'bottom-up' approach is a key to success. Rubber Market Production The supply of natural rubber (NR) hinges upon the interplay among several factors, including production capacity, underlying technological change, input and processing costs as well as price differential with synthetic rubber (SR). During 1961-2005, NR production grew on average 3.4% a year. By the early 1960s synthetic rubbers had overtaken natural rubber in volume. In 2005, the six leading producers -Thailand, Indonesia, Malaysia, India, China and Vietnam - accounted for roughly 89% of world NR production. Combined output in Thailand, Indonesia and Malaysia alone represented around 70% of the global output. Despite the substitution effect with SR, world natural rubber production increased from roughly 2,1 million tonnes in 1961 to over 9,1 million tonnes in 2005. According to IRSG's predictions for 2009, the world's production rise for NR should not overcome 3.6% and 3.5% for SR. As more, Indonesia should stay the most dynamic market with a rise of 6.8%. NR production (thousand tonnes) - largest producers, 1961-2005

Source: UNCTAD secretariat (Data: FAOSTAT database)

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Production in Thailand has been increasing steadily during 1961-2005, from a reported 186,100 tonnes in 1961 to over 3 million tonnes in 2005 (at an average rate of 6.5% per year over the period). It has tended to stabilize for the last two years due to bad weather conditions (heavy rains). Thailand nevertheless remains the world leading NR producing country. Its share of world output has also increased over the years, from as low as 8.8% in 1961 to over 33% in 2005. Indonesia has become the second largest producer behind Thailand. NR production in Indonesia has been rising during 1961-2005 to reach 2.128 million tonnes by 2005 (+4.8%), at an average rate of 2.6% per year. It should be noticed however that its share of world output has declined slightly over the years, from as high as 32.7% in 1961 to 23.3% in 2005. This was caused by much sharper rise in the output of the largest producing country, Thailand, as well as increases in India and China. Indonesia, NR area, production and yields, 1961-2005

Source:UNCTAD secretariat (Data: FAOSTAT database)

ConsumptionRubbers are intermediate goods used in producing final consumer goods (notably tires). In this respect, demand for a specific type and grade of rubber is derived, since it depends on demand for determined final goods, of which rubbers are only one component. General income, expected price of a specific type and grade of NR and of its substitutes, expected price of final goods, as well as relative processing costs for NR and SR can all be regarded as having an impact on NR consumption. The five largest NR consuming countries are China, the United States of America (USA), Japan, India, and Malaysia. World rubber's consumption was of approximately 21 millions of tons in 2005 (+3,1%). The growth is less significant compare to the last four years (especially 2003 with a peak of 6%). IRSG estimates that the world rubber's

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consumption should rise of 4% per year until 2009 to reach 24.5 million of tons. Total rubber consumption (thousand tonnes) - NR versus SR, 1998-2005

Source: UNCTAD secretariat (Data: International Rubber Study Group)

Synthetic rubbers (SR) overtook NR in production and consumption volume since the 1960s. Growth in natural rubber (NR) usage has been stronger than that of synthetic rubber (SR) for 1998-2005 (a growth rate of 4% -annual average- as compared to 3% for SR). NR consumption indeed grew of 5.5% in 2005 compare to 1.3% for SR consumption, which led to a ratio of 57.7% (the weakest since 1964). Sharply rising oil prices, which may add significantly to the costs of major SR producers, and developments in NR pricing relative to SR (the relative NR/SR % price ratio rose from around 80% to 120% between the start and finish of 2005) have intensified the debate surrounding possibilities for substitution. According to ISRG's, the growth in rubber's consumption predicted until 2009 should be more absorbed by NR (4.7%) than SR (3.6%). The ratio for SR would therefore decrease again to reach 57.2% in 2009. Share (%) of natural rubber in rubber consumption, top 10 rubber consumers, 2005

Source: UNCTAD secretariat (Data: International Rubber Study Group)

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In China (the largest single consumer of NR), SR consumption increased at an estimated 14% a year over 1998-2005 to reach 2.6 million tonnes by 2005 (up from 1 million tonnes in 1998); NR consumption has been increasing since 1998 at 12% per year, i.e. from 839 thousand tonnes in 1998 up to around 1.8 million tonnes in 2005. As mentioned in the uses section, technical requirements is an important reason for using NR over SR in many applications. The reader is referred to that section for an overview of the relative share of NR and SR in tire versus general rubber goods manufacturing. Trade flows NR exports NR exports (thousand tonnes), 1961 - 2004

Source: UNCTAD secretariat (Data: FAOSTAT database) * Figures for NR include: NR latex; dry NR; and natural gums ** China: China; China, Hong Kong SAR; and China, Macao SAR

Indonesian NR exports also paralleled trends in production (exports have increased on average by 2% per year during 1960-2004). In the 1990s Indonesia's share of world exports reached its highest peak during the Asian financial crisis in 1998 at 31% (the reason behind the relatively sharp rise in Indonesian exports during this period was identified in the relatively weak currency). Over 1999-2004, Indonesia accounted for an average 26% of world exports. Malaysian NR exports have declined in both absolute and relative terms. In 2003, NR exports dropped to about 946 thousand tonnes or 14% of the world total in 2003, compared with 1.66 million tonnes and more than 50% in 1977. This sharp decline in exports follows the trend in production. It should be stressed also that an increasing share of the declined rubber output has been consumed domestically. Malaysia reported a 11

stronger export performance in 2004 (52% increase over the previous year), which may suggests a partial reversal of the downward trend. It is interesting to note Vietnam emerging as an exporter of some note. Breakdown of exports by countries (%), average 1999-2004

Source: UNCTAD secretariat (Data: FAOSTAT database) * Figures for NR: NR latex; dry NR; and natural gums

In terms of NR exports by type (dry NR versus NR latex), in Indonesia, Malaysia and Thailand the share of dry rubber to all shipments was 99%, 92% and 81%, respectively (average during 1999-2004). NR exports by types (million tonnes), average 1999-2004

Source: UNCTAD secretariat (Data: FAOSTAT database)

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For all major exporters, available trade data show an increase in technically specified rubber (TSR) at the expense of sheet grades (RSS) and latex. According to some estimates from the IRSG (RIR, March 2004), in Indonesia the share of TSR exports to all shipments increased significantly (from 41% to 96%) during the period 1973-2003, while the shares of RSS and latex declined to 3% and less than 1%, respectively. NR imports Mainland China emerged in 2003 as the world's largest natural rubber importer and kept its leading position with NR imports reaching more that than 1.4 million tonnes in 2004, nearly 32% more than in 2002. This increase was fuelled by ongoing growth in demand for automobiles coupled with stagnation in domestic natural rubber production. In Malaysia there has been a rise in imports as a result of the rapid growth in domestic demand for NR combined with a decline in domestic NR production. Breakdown of imports by major importing countries (%), average 1999-2004

Source: UNCTAD secretariat (Data: FAOSTAT database) * Figures for NR include: NR latex; dry NR; and natural gums ** China: China; China, Hong Kong SAR; and China, Macao SAR

Most NR trade is still interregional (from South-East Asia to North America and Europe), although the increasing consumption of South-East Asian NR in Asia is enhancing the share of that region. Marketing chains Production of natural rubber (NR) is regionally concentrated in South and South East Asia; yet the bulk of consumption occurs in North America, Europe, Japan, and China. The marketing network for NR has thus the crucial role of linking the regional concentration of producers on the one hand and consumers on the other. It entails a multitude of dealers, selling and buying agents, brokers and exporters, who perform discrete but related functions at various stages of the chain.The overall marketing chain may be examined by considering the internal and external marketing separately. Internal marketing: Estates v. smallholdings Rubber production is carried on in both estates and smallholdings. These two NR

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producing sectors possess discrete organisational structures and marketing channels. Marketing of estate rubber NR production and processing is fully integrated in most of the bigger estates. Moreover, a few large estates have moved downstream into rubber goods manufacturing and other activities. Some major players in the rubber plantation industry are now diversified industrial conglomerates which derive a small share of their income from production of the raw product (consider, for example, the Guthrie group in Malaysia). Marketing structures vary greatly between and within different geographical locations. A few large estates have direct links to consumers and, in such cases, direct sales are carried out. There may be either direct consignment to selling agents in consuming countries (as done by agency houses) or sales to consumers' buying agents who operate locally. The balance of estate NR is handled through open trading. Essentially in this structure, estates rely on dealers and brokers operating both locally (primary market) and in consuming countries (terminal markets). Estates usually retain ownership over the product until the final stage. Moreover, large estates normally sell forward. Marketing channels for smallholders' rubber The arrangements in the marketing of smallholders' NR depend largely on the size of the holding and its integration into group schemes. Marketing of smallholders rubber

Source: UNCTAD secretariat

First level traders and their agents collect rubber in sheet (most often unsmoked sheets) and crepe forms from smallholders, sort and sometimes smoke it, and sell it to "middle" dealers. From the middle dealers the rubber is delivered to wholesale dealers and exporters, who sort, grade and pack it before shipment against f.o.b. or c.i.f. contracts. Strategies for the development of the smallholder sector included processing via group processing centres (GPCs). The GPC's members are able to benefit from an increase in scale and sophistication in rubber processing. They tend to produce better quality sheets, which are then sold to the middle- and upper-level network of traders (bulk sales through tenders). External marketing: Open and direct trading Rubber commodity markets provide a channel of supply from producers to final consumers via dealers and brokers (open trading). In addition, a few large producers may have direct links to consumers and, in such cases, direct sales are carried out (direct

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trading). Marketing channels (NB: bad printed quality)

Source: UNCTAD secretariat

Open trading In the earlier structure of NR trading, dealers and brokers openly traded rubber through "primary markets" in Kuala Lumpur and Singapore. Rubber from these primary markets was then forwarded to counterpart "terminal markets" in London, New York, Shanghai, Amsterdam, Hamburg, Paris, and Tokyo. Primary and terminal markets perform an important function in matching supply and demand and discovering prices. Two types of trading strategies occur in these markets: spot or cash transactions involving trade in physical commodities and futures trading. NR handled through open trading notably involves less specialist grades (e.g., TSR 20, RSS1 and RSS3) and crops from less developed regions, particularly in Africa. The few dealers transacting most of the rubber on open markets are actually subsidiaries of large companies. Major trading firms in the London market included Symington and Son. Ltd. (along with Symington Italia Gomma Lattice of Rome, part of the Guthrie group which controls large plantations in Malaysia) and Cargill plc (a subsidiary of the giant grain marketing company, with trading offices in Singapore and Tokyo). Direct trading Direct trading between producers and consumers (especially tyre-making consumers) has been encouraged by further developments in the rubber industry (notably, requirements for better consistency and tailoring to consumer needs and the growth of rubber goods manufacture in East Asia). Direct trading may occur via sales to consumers' buying agents operating in producing countries (for example, the rubber-buying offices set up in Singapore by most of the international tyre companies). Yet there are also other direct outlets. In particular, a few large estate companies and smallholder group organisations have deepened and extended their marketing links with particular consumers, sometimes operating through selling agents in consuming countries. NR direct trading between big suppliers and consumers typically entails long-term contracts of up to 18 months. Direct trading arrangements often involve specialty rubbers 15

tailored to consumer needs. 3.2 Exports regulations: In compliance with the decree of the Ministry of Industry and Trade (n 124/MPP/Kep/5/1996, goods or commodities that can be exported are classified into four categories and they are as follows: goods subject to Export regulations (textiles, timber and wooden products, sandalwood products and handicrafts, manioc and rattan products), goods subject to inspection, goods that are forbidden for Export, goods that are free for Export. The specific following documents are required for exports: Sanitary certificate: special sanitation, fumigation, and other similar certificates are required only for the import of goods generally prohibited or restricted. Goods originating in places infected with pests and cholera must be disinfected before their import. The entry and Export of some plants and seedlings require a permit from the Ministry of Agriculture or from a designated official. Shipping restrictions: All Indonesian government imports and exports must be carried out on Indonesian vessels. 3.3 Other formalities and documents: Standard and special requirements: The possibility of long storage at dock warehouses in the tropical climate, rough treatment by Dockers and pilferage at ports should be taken into consideration in packing goods intended for this market. Packing may be made with oil-lined paper to withstand heat and humidity and prevent deterioration. Methods of payments . FINANCIAL REGULATIONS OF FOREIGN TRADE OPERATIONS: .1 Banking system: The Bank Indonesia has recently introduced flexibility at the level of the exchange rate of the Rupiah along with trade incentives. This bank issues currency, supervises and regulates financial institutions including banks. It also grants loans to commercial banks and refinances the loans of these banks. At the end of 1995, the banking system of Indonesia included the following banks: 240 commercial banks, 7 of which are state banks, 166 private national foreign exchange banks, 30 joint banks, 10 foreign branches and 27 local government owned banks (for the 27 provinces). 250 financial institutions operating in the leasing sector, financing, credit cards and all sorts of credits. 150 insurance companies for the industrial sector. 16

18 pension funds for industrial growth. 5. CUSTOMS TAXATION: Within the framework of the ASEAN-AFTA, a progressive import liberalization is emerging between Member States. The decrease in customs duties is due to the efforts made by the Indonesian government to fight inflation and to the WTO agreements. 5.1 Applicable duties and taxes: 6. FOREIGN TRADE LOGISTIC: International transports: Maritime transports: There are more than 300 ports in Indonesia, 133 of which are devoted to foreign trade activities. The main ports are: Tanjunk, Priok near Jakarta, Tanung Perak near Surabaya, Begawen near Mena and Ujunpandung in the south of Sulawesi. Daily sailings are available between Belawan and Penang int Malaysia. Air transports: Indonesias national airline is Garuda (GA). The international airport Soekarno-Hatta is 20 km northwest of the city (travel time-45 minutes). A bus goes every 30 minutes to the city from 6.30 a.m. to 900 p.m. Other buses link Jakarta to Halim Perdanakusuma airport (HLP) 13 km south east of the city. There are also Polonia Airport in Medan, Ngurah Rai airport 13 Km south of Denspar, Juanda airport near Surabaya, Ratunkangi airport in Manado and Hasanuddin airport near Ujung Pandang. There are other airports for internal services, these are Kemayoran, Bouraq Indonesia, Merpati Nusantara and Sempati. Land transports: Railways Trains connect every day Belawan and Penang through the National Railroad of Indonesia. The railroad is 6,362 km long and is situated between Sumatra, Madura and Java. There are three railroads: North railroad: Sumatra-Belawan-Medam and Tanjoung Balai/Rantu Prapet (2 to 3 trains per day). South railroad: Palembang-Panjang (3trains/day). Railroad leading to Java. Birma express links Jakarta to Surabaya. Road networks:

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There are roads between Kalimantan and Sarawak and Sabah Malaysian States in Borneo Island and Irian Jaya and Papua New Guinea. The road network extends over more than 245,000 km of which 200 km are on the motorway. There are good road links between Java, Bali and Sumatra. With a view to increasing foreign investments, West Irian has been provided with a highly developed communication infrastructure between Jayapura and foreign countries. 6.2 Telecommunications: P.T. Telekom (Domestic and telegraph services) provides telecommunications services, P.T. Indosat (International telecommunications) and P.T. Pos Indonesia (Postal services). Thanks to Indonesias satellite programme (Palapa) telecommunications in Indonesia are of good quality. There are telephone links with 27 provinces and other centers. There are 159 telephone lines per 1000 inhabitants. Apart the usual telephone system, cellular phone (GMS, AMPS and NMT), are more and more widely used, in 1996 subscribers were more than 300,000 and pager subscribers 400, 000. Postal services will be installed in 40% of villages. 6.3 Distribution system: In compliance with regulations established by the Indonesian Government, Indonesian companies only may carry out the import, Export, wholesale and retail distribution of imported or locally produced goods. Foreign investors are not allowed to undertake the distribution of products in the local market. Foreign companies may open a local representative office with the authorization of the Indonesian Ministry of trade and Industry. But only one representative office per firm is allowed. The largest markets are located in Java, Jakarta, Sumatra, Sulawesi, and Kalimantan. 7. USEFUL ADDRESSES: ORGANIZATIONS AND PUBLIC ESTABLISHMENTS ADDRESSES TEL/TELEX/FAX Ministry of Trade. Department of Trade 7th Floor Centre for International Trade Relations 5, JI. M. I. Ridwan Rais Jakarta 10110 Tel: (6221) 3841961 Fax: (6221) 3522749 National Agency for Export Development 10130 Tel: (6221) 3841072 8, JI. Gajah Mada P.O.Box 443 /JKT Jakarta

Fax: (6221) 3848380 Indonesia Exporters Federation Sudirman Tower 8th Floor , 60, Jalan Senderal Sudirman Jakarta 12190 Tel: (6221) 5226522

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Telex: 60966 ia Fax: (6221) 5226528 Indonesia chamber of commerce and industry Thamrin 20 Jakarta 10350. Tel: (6221) 324000 Telex: 61262 Fax: (6221) 3150241 Director General of Customs and Excise. Department of Finance P.O.Box. 108 Jakarta 13230 Tel: (6221) 4890308 Fax: (6221) 4890871 Bank of Indonesia Fax : (6221) 2311550 JI. M. H. Thamrin 2 Jakarta 10010. Tel : (6221) 2311180 JI Jend. A. Yani Chandra building , Jalan M.H.

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References: 1.

General ti http://ww 2 . Murdoch www.istp20

3. UNCTAD