Industry Minister: Higher Investment Expected After Elections
Date 20 April 2019
Minister of Industry Airlangga Hartarto expressed his optimism that Indonesia would see an increase in investment and expansion in manufacturing industry after the 2019 Elections by implementing the Making Indonesia 4.0 road map.
“After the 2019 Elections there will be many priority projects that will soon be running, including several petrochemical industries, finalization of regulations on electric cars, as well as incentives for industries,” Minister of Industry said in Jakarta, Saturday (20/4).
Airlangga explained that the trend of industrial growth after the election will occur, because Indonesia is very mature in the implementation of its democratic system. A mature democracy is the Government’s asset in attracting foreign investment, he said.
“Optimism in development echoed by the Government is also important to attract investment. All industrial sectors will be running after the presidential and legislative elections,” the Minister said.
Airlangga also expressed his optimism that economic and political condition as well as security in Indonesia are stable and conducive for business or industrial activities. “Several new policies will be launched to make it easier for business players in Indonesia to do their business,” he said.
For the record, Saudi Arabia aims to invest in Indonesias petrochemical industry sector worth US$ 6 billion, equivalent to Rp84.31 trillion. This investment plan has been discussed by President Jokowi and the Kingdom of Saudi Arabia, when the President visited the Country several days ago.
Saudi Arabia wants to work together to make Indonesia a hub for the petrochemical industry in Southeast Asia. To that end, President Jokowi has instructed the relevant ministries and non-ministerial government institutions to immediately conduct studies to facilitate the realization of these investments.
“The Ministry of Industry continues to encourage the growth of the petrochemical industry in Indonesia to expand the manufacturing structure from upstream to downstream sectors. “The petrochemical industry produces various commodities that can be used as raw materials in the packaging industry, textiles, household appliances, as well as automotive components and electronic products,” Airlangga said.
The petrochemical industry also contributes significantly to the national economy. Data from Ministry of Industry shows that in 2018, investment in chemical and pharmaceutical industries reached Rp39.31 trillion. In addition, chemical industry and chemical goods industry generated an export value of US$ 13.93 billion.
In addition, Ministry of Industry predicts that food and beverage industry can grow more than 9% in 2019 due to additional investment. This year, there will be Rp79 trillion investment in food and beverage industry, textiles and textile products, and footwear.
The investment in food and beverage industry will be Rp63 trillion, 11% higher from that of 2018, while investment in footwear and textile and textile products industries will be Rp2.8 trillion and Rp14 trillion respectively, almost doubling from last year.
The Government has made the labor-intensive sub-sector of the industry a significant driver of manufacturing growth and a significant contributor to the export of non-oil and gas. “The Government will continue to boost performance and attract investment in export-oriented and import substitution industrial sectors,” the Minister added.
In 2018, non-oil and gas export was recorded at US$ 130 billion, 3.98% higher compared to that of 2017. “In 2018, the contribution (of non-oil and gas export) reached 72.25%. So far, the industry has become the biggest contributor. It means that the products of domestic manufacturing industries are very competitive at the global level,” Airlangga said.
The data from Ministry of Industry also shows that investment in manufacturing industry sector continues to grow significantly. In 2014, capital investment amounted to Rp195.74 trillion, then rose to Rp222.3 trillion in 2018. This increase in investment provides employment up to 18.25 million people in 2018, which contributed to 14.72% to total national workforce.
From 2015 to 2018, there was a 17.4% increase and it is expected to increase employment in 2019, in line with the realization of investment,” the Minister said.
Ministry of Industry aims to boost growth of the manufacturing industry up to 5.4 % in 2019. The estimated industrial sub-sectors with high growth are food and beverage, machinery, textile and apparel, leather, leather goods, footwear, metal, computer and electronic goods. (Biro Humas Kemenperin/ES)
Translated by: Ridwan Ibadurrohman
Edited by: Mia Medyana