The government estimated
that the growth of the national manufacturing industry in 2014 will reach 6% -
7%. The estimate refers to the target of Indonesia’s economic growth in 2014 at
6.4% - 6.5%, as the global economy has not fully recovered from crisis. The
global crisis and the global economic growth slowdown will continue to
overshadow global economic growth, including Indonesian economic growth.
International Monetary Fund (IMF) pegged a pessimistic rate of Indonesia’s economic
growth, i.e. 5.7% - 5.8%. However, the government is optimistic that this year
the Indonesian economy will grow 6%.
The Indonesian Chamber of Commerce and Industry (KADIN
Indonesia) considered that industry growth target of 6% this year will be
achieved as long as downstreamization program is accelerated. Natsir Mansour,
Vice Chairman of KADIN Indonesia for trade, distribution and logistics, in
Jakarta, on Monday (August 18), said that industry downstreamization program,
especially mineral, can increase value added in the country. He said that this
during this time, the trade deficit was due to many imports of raw materials
for the local manufacturing industry at about 70% of demand.
According to Natsir, the implementation of
downstreamization in a variety of industry lines since the beginning of this
year is often hampered. In addition to being affected by the political and
macroeconomic climate, it is also hampered by incentive problem. He saw that
the government has not prepared the appreciate incentives for guaranteed gas
supply. Besides, he said, competitiveness of the industry should increase,
especially that Indonesia will face the ASEAN Economic Community (AEC) by the
end of 2015. He considered that competitiveness should be improved and things
that burden production costs, such as high cost of logistics, high bank
interest rates, and high electricity tariffs, should be removed.
Citing data from the Ministry of Industry, in 2014, some
industry sectors that will be developed by the government are machinery
industry, heavy equipment industry, medical equipment, low-emission motor
vehicles, shipbuilding, aerospace, railways, defense equipment, electronics and
telematics, software and multimedia content.
In 2014, the government continued the industry
downstreamization program to increase value-added, such as in agro-based
industries like oil palm, cocoa, rubber, rattan, mineral resource-based
industries (iron, aluminum, nickel, copper) and oil & gas-based industries
(petrochemical).
Industry development in the long term not just relied on
natural resource-based industries, but also human resource competence-based
industries, including research improvement, development, mastery of technology,
and innovation.
Meanwhile, contribution of the industry sector to labor
absorption continues to increase. Secretary General of the Ministry of
Industry, Ansari Bukhari, said that the number of workers in the manufacturing
sector rose from 12.37 million in 2011 to approximately 15.73 million in 2013.
Manufacturing industry has absorbed approximately 13.87% in Indonesian workers
and ranked the fourth largest after agriculture, trade and service.
According to Ansari, to support program of downstreamization
of agro-based, oil & gas, and mineral-based industries, and for development
of the manufacturing industry, it has to be supported by competent workface.
Ansari further said that to anticipate and prevent the implementation of AEC in
2015 and to prepare the industrial workface in order to compete at the ASEAN
level, the Ministry of Industry has taken some steps, among others, Vocational
School and Vocational Higher Education within the Ministry of Industry has been
directed to organize specialization and competency-based education accompanied
with a teaching factory. Nowadays, we need more competent workface to
anticipate growth of the industrial sector,” Ansari said. (E)
Business News - August 20, 2014
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