Software piracy is costing the Indonesian economy billions of dollars each year and is stymieing the creation of a local information technology industry, a Microsoft representative said.
Some 87 percent of computer software on the market in Indonesia in 2005 was pirated, Microsoft Indonesia's Irwan Tirtariyadi said citing a study from the Business Software Alliance, an organisation representing manufacturers.
Lax law enforcement and widespread corruption contributed to Indonesia clocking in with the fifth highest rate of software counterfeiting in the world, he said, after Vietnam, Ukraine, China and Zimbabwe.
"I've heard when police come to a shop (selling pirated software) it is closed. Basically information is leaking and this is an indication of the quality of law enforcement in action," Tirtariyadi said.
Tirtariyadi told a gathering of foreign reporters that if piracy dropped by just 10 percent, it would add 3.4 billion dollars to the economy, according to figures cited by the International Data Corporation.
Counterfeiting also inhibited an "inventive culture" and the development of a strong local information technology (IT) industry here, he said.
"Some students like to create new software but three months later they find it's pirated," he said.
Indonesia, Southeast Asia's largest economy, has less than 100 IT companies, whereas neighboring Singapore, with a far lower rate of piracy, has between 400 to 800 such companies, he added.
Aris Ideanto, a Justice Department official, admitted that weak law enforcement and a lack of government coordination had hindered government efforts to crack down on counterfeiting.