Efforts to bolster domestic demand for local products are intensifying  as the drafting of a regulation to enforce government spending on uniforms worn by civil servants and employees of state enterprises nears completion.

Fauzi Aziz, the Industry Ministry’s director general for small- and medium-scale industries, said Wednesday the Office of the State Minister for Administrative Reform had prepared a letter that would be attached to the planned regulation and be passed on to related institutions to ensure enforcement.

“[State Minister for Administrative Reform] Taufik Effendi showed us the letter two days ago [Monday],” he told the press on the sidelines of a five-day craft exhibition that began Wednesday.

“The letter stipulates that he urges his subordinates to look at the use of state budgets for civil servants and employees of state enterprises,” he said.

Fauzi said the letter would require the state budget and regional budgets to set aside an allocation to be spent for civil servants and SOE employees on up to 470 local products comprising 21 product categories.

“The letter will be attached to the [planned] Industry Ministry regulation, which is being finalized by [the director general for metal, machinery, textile and miscellaneous industries] Ansari [Bukhari],” he said.

The regulation, he said, would be introduced next week and be effective promptly after signature by Industry Minister Fahmi Idris.

Fahmi, who is appointed to lead the national team on Domestic Goods Usage Intensification (P3DN), has been urging the use of domestic products to help local industries survive the impact of the global economic crisis, which has weakened global demand.

His ministry has been working with the Office of State Minister for Administrative Reform, the National Education Minister, the National Police and the Indonesian Military to formulate standards in the planned ministerial regulation.

The regulation will serve as an auxiliary regulation to a 2009 presidential instruction on guidance to consumption of local products.

Currently, there are around 2.5 million civil servants.

Under the 2009 state budget, up to Rp 90 trillion (around US$8.2 billion) will likely be spent on local products for civil servants, members of the police and armed forces, as well as workers at state companies.

The figure represents about 28 percent of the total allocation set aside under the 2009 budget for ministries and state institutions.

Against the backdrop of slowing overseas demand as the world tips into recession, the government has turned to the domestic market to sustain economic growth.

Since early this year, entry for imports of products such as shoes, textiles, electronics and food and beverages has been limited to certain designated ports to help protect local producers.

Associations representing the textile, shoe and electronics industries have confirmed that orders are now on the rise following the import restrictions, with shoe producers predicting full-year orders to increase by Rp 5 trillion.

Normally, annual sales of shoes reach Rp 25 trillion, including about Rp 10 trillion for locally made ones.

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