Indonesian industrial sector still faces a number of challenge in welcoming the ASEAN Economic Community (AEC) 2015. However, if it can be put to good use, it would be a great opportunity for the national industrial product. The big challenge for Indonesia given the very large number of population is if Indonesia cannot become market player, it will be the largest target market for ASEAN countries.
Deputy minister of industry, Alex SW Retraubun, in Jakarta, on Wednesday (June 11), believed that the AEC moment is an important historical moment for Indonesia. Indonesia is considered necessary to take an important step in developing the national industry. Leading industrial sectors should be able to dominate the ASEAN and the domestic markets. Indonesia should be able to become a major player in the country. Currently, there are nine sectors which are the focus of development is on the automotive, electronics, food, cement, apparel, footwear (casual shoes), furniture, food & beverages sectors.
Alex said that the government will continue to take strategic steps to create a synergy of national industrial and trade policy development in meeting the challenges ahead and realize the ideals of national development. The strategic steps are to better prepare it self in facing the increasingly tight competition among ASEAN countries trough the implementation of AEC 2015.
The Deputy Ministry of industry explained that in the midst of an economy which is not yet stable, non-oil & gas processing industry grew by 5.56% or higher than the economic growth of 5.21%. Industry sectors which experienced high growth are food, beverages and tobacco industry at 9.47%; transportation equipment, machinery and equipment at 6.03%; and wood and other forest product at 5.17%.
Meanwhile, exports of industrial product in the first quarter of 2014 amounted to USD29.27 billion, an increase of 3.55% over the same period in 2013.Exports of industrial product accounted for 66.05% of total national exports. Industrial products trade deficit has been reduced by 87.78%, from USD3.87 billion in the first quarter of 2013 to USD473.8 million in the first quarter of 2014.
This is because there is a surplus of USD173.9 million in February 2014 and USD416.2 million in March 2014. With the efforts made by the government and industry stakeholeders, we are quite optimistic that the trade performance of industrial products will be more positive. On the other hand, investment performance of the industrial sector still needs to be further improved.
Another challenge, according to Alex, is to reduce the importation of raw materials the cause current account deficit. The government is committed to improving the performance of the industry through a number of steps. One step is to improve the performance of investment, such as domestic investment (PMDN) and foreign investment (PMA). Domestic investment reached IDR 11.11 trillion, an increase of 1.73%. While, foreign investment reached USD3.49 billion. This should be a concern given that investment is one of the growth drivers which absorbed workers in the industrial sector.
He added that the problem of raw material importation is believed to be resolved after the passage of Law No. 3/2014 concerning Industry the Law mandates the existence of National Industrial Development Master Plan (RIPIN). The focus of national industrial development has been set on 24 priority industries categorized based on source of raw materials, labor usage, and technology content. There are four groups of priority industries, among others, mineral, oil & gas, and coal-based industries; agro-based industries, and human resource and technology-based industries. (E)
Business News - June 11, 2014