Thursday, 9 January 2014


The processing industry was still the main propeller of national economy and the greatest source of economic growth in quarter III 2013. Accumulatively the sector posted growth of 5.55%. Data of the Ministry of Industry had it that non oil-gas processing industry posted growth of 6.22% while the oil-gas industry contracted by around 3.3%. With that growth record, growth of non oil gas industry over the first quarter of 2013 was not only slightly higher than growth of the same period of 2012 but also higher than national economic growth of only 5.83%.

            Although the global economic condition had not fully recovered from crisis, growth of non-oil gas industry through 2013 was still showing positive trend. All through the year growth of non oil gas sector managed to surpass national economic growth. Still, the Ministry of Industry was pessimistic about the present economic condition. This was set forth by the Minister of Industry Mohammad S. Hidayat in Jakarta on Tuesday [24/12]. Minister Hidayat felt he could not be too optimistic because the year 2014 was not exactly a time of crisis but was more of a situation of uncertainty due to the political climate related to the General Election.

            Besides, the restless climate due to the Fed’s act to run Tappering Off would till February 2014. The Minister of Industry admitted that by quarter III of 2013 Indonesia’s economic growth was slightly slowing down. Accumulatively national economic growth through quarter III of 2013 was lower than accumulative growth of 2012. Somehow Indonesia’s economic growth was by far still better than that of other Asian countries expect China and the Philippines which grew by above 7%.

Minister Hidayat disclosed that today he was focusing effort on preventing mass dismissal in national labor intensive projects in 2014. Labor intensive projects manufacturing sector was predicted to face hard challenges from global economic slowdown, Rupiah depreciation against USD, increase of basic electricity tariff and increase of standard provincial minimum wages. He showed as an example recently the Indonesian textile Association [API] would dismiss 400,000 workers next year if electricity tariff were increased next year. The TPT industry sector was one of the leading labor-intensive sectors.

The Ministry of Industry had been preparing strategic measures to prevent mass dismissal such as by tax holiday over a certain period and tax allowance for factories as well as Government borne income tax, tax exemption for sales of luxurious good [PpnBM] and Import Tax. Besides, Hidayat said, the Ministry would maximize implementation of safeguard instruments and rescue of national industry, infra structure and benefiting the US and Japanese markets to the maximum.

The Ministry of Industry expected increased investment in the industry sector could maintain performance of the industry sector today. The Ministry of Industry noted that in January-September 2013 the total value of domestic investment [PMDN] came to Rp 38.29 trillion, an increase of 0,47% against same period of 2012. Investment in the industry sector contributed 40.68% of total PMDN investment. Meanwhile total of foreign investment [PMA] of the industry sector was posted at USD 12.43 billion, an increase of 4.62% against same period of 2012. Investment of industry sector constituted 58.62% of total PMA investment through January-September 2013. 

Business News - December 30, 2013

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