Remarks of President of the Republic of Indonesia on the Inauguration of Indonesian Employers Association (APINDO) Board for 2023-2028 Period, at Grand Ballroom, Kempinski Hotel, Central Jakarta, DKI Jakarta Province, July 31, 2023
Bismillahirrahmanirrahim.
Assalamu’alaikum warahmatullahi wabarakatuh,
Good afternoon,
May peace be upon us all,
Om swastiastu,
Namo buddhaya,
Greetings of Virtue.
Distinguished the 10th and 12th Vice President of the Republic of Indonesia Bapak H. Muhammad Jusuf Kalla, I have not met him yet because I came here earlier, Pak JK;
Distinguished Your Excellencies Ambassadors, Ambassadors of friendly countries;
Ministers of the Indonesia Onward Cabinet: Coordinating Minister for Economic Affairs, Minister for Trade, Minister for Health;
Honorable Chairperson of the Indonesian Employers Association (APINDO) for the term of 2023–2028, Ibu Shinta Wijaya Kamdani and all attending members, Chairperson of the Advisory Council and all its members, Chairperson of the Expert Council and all its members, Chairperson of the Indonesian Chamber of Commerce (KADIN), Chairperson of the Indonesian Young Entrepreneurs Association (HIPMI) also attending this event;
Governor of Jakarta and all Governors present this evening;
Honorable Chairperson of Workers Union and Chairperson of Labours Union;
Board members of APINDO from 32 provinces;
Ladies and Gentlemen,
First of all, I would like to express congratulations on the Inauguration of the Chairperson and all the board members of APINDO for the term of 2023-2028. I also heard that Ibu Shinta, the Chairperson of APINDO, is the first woman who take the chair of APINDO. Indeed, there is a first time for everything, and it happens to APINDO which has Ms. Shinta as the first woman chairperson. And, this could be a good start because I heard that, I am happy to hear what Ms. Shinta said about stunting. Usually, if we talk about APINDO, we always discuss about profit and loss, how much is the profit margin, how much money is made. However, this evening, I am happy APINDO has talked about stunting. And, I hope that the Indonesian Chamber of Commerce and Industry, Indonesian Young Entrepreneurs Association will also talk about stunting handling.
It is because our stunting rate was so high in 2015, at that time, 37 percent of our children suffered from stunting, 37 percent. At the end of 2022, the stunting rate decreased to 22 percent. Our target is to reach 14 percent in 2024. However, based on what I observed on the ground, it is not easy. However, I believe that despite the difficulty and intricacy, the target can be achieved with the participation of entrepreneurs. Once again, I appreciate APINDO in addressing this stunting issue. Based on what Ms. Shinta said that there are one thousand entrepreneurs, for example, every entrepreneur fosters 2,000 of our toddlers. Anyway, why a large-scale entrepreneur only adopts 2,000 toddlers? That is too small. What must be provided? Since the children are from underprivileged families on average, then give them eggs, fish, chicken meat, red meat, vegetables. It is not a big deal, but it must be carried out regularly. If it is carried out regularly, their weight will be checked and every month it can be monitored, the result will be more effective if it is done consistently.
Once again, as the Chairperson of APINDO said that the big problem burdening our demographic bonus in the future shall be stunting. Actually, I wanted to talk about demographic bonus but it has been mentioned, described by Ms. Shinta, so I did not do it. Ms. Shinta described demographic bonus in more detail.
So, this evening, I will talk about, once again, I kept telling this time to time, downstreaming. In my opinion, there are two important things that enable us to make a leap as a developed country. Firstly, the development of human resources due to the demographic bonus, which can be successfully done, has not been realized yet. If we can do it, and then downstreaming can be successfully done for all minerals, plantation, agriculture, fisheries, all can be downstreamed, according to the calculation of the World Bank, Mckinsey, IMF, OECD, it will provide result in 2040 to 2045, but I believe it can be earlier. Therefore, we must carry on this downstreaming, although we were sued by WTO, even though we were warned by IMF, no matter what, we must carry it on. If we see, I give you an example on nickel. I also kept telling this time to time, but I will tell about it over and over again, so we are really aware of how much the number increases due to the downstreaming.
On the opening of job opportunities following the downstreaming in Central Sulawesi. Before the downstreaming, only 1,800 workers recruited in nickel processing plant. After the downstreaming, 71,500 workers were recruited due to nickel downstreaming in Central Sulawesi. Then, in North Maluku, before the downstreaming, only 500 workers, but after the realization, 45,600 workers are recruited in the local nickel downstreaming.
Then, if we see, it applies to all nickel derivative products, not only iron and steel. I had mentioned USD1.1 billion only for iron and steel, but it applies to all nickel derivatives. During 2014- 2015 and afterwards, we exported raw materials and gained only USD2.1 billion, approximately Rp31 trillion. After the downstreaming, we have gained Rp510 trillion, from USD2.1 billion jumped to USD33.8 billion, it means that it has increased by multiple folds. It is only from some derivatives. If more derivatives can be created in the future, Ladies and Gentlemen, you can imagine how much will we gain from it, and it is only from nickel.
Later, a question that may be raised, “Sir, so, what is the benefit for the country? Those who surely get benefit are the business actors.” Hold on. From the amount of Rp31 trillion, the country certainly levied taxes, Value-Added Tax (PPN), Income Tax (PPh), royalty, Non-Tax Revenue, and so on. Then, the amount jumped to Rp510 trillion, and the country also levied Value-Added Tax (PPN), Income Tax (PPh), royalty, Non-Tax Revenue. So, which one is higher?
Actually, I want to inform you about the one in Morowali on how much the country can get, but it is the Directorate General of Taxes’ secret. Still, it is really huge, and I was also surprised to know how much the number is. So huge. This is, once again, only from nickel.
On regional economic growth. In Central Sulawesi, previously the economic growth reached 7- 7.5 in average, but after the downstreaming, it went up to 15 percent. In North Maluku, previously, it reached 5.7 percent, but after the downstreaming, it reached to 23 percent. If the growth happens in all provinces, Ladies and Gentlemen, you can imagine how much our national economic growth will be, considering the aggregate of it all. Also, do not let anybody writes that poverty still exists in North Maluku. Indeed, it is the task of provincial, regency, and city governments through the regional budgets that gain benefits from the companies operating there, or, I always said to the regional governments to ask the companies to let the regional micro, small, and medium enterprises provide the catering services. Supplies of vegetables, eggs, meat, and all can be provided by small-scale business actors in the regions. This will improve economy in the regions where downstreaming exists.
Therefore, we will not stop only in nickel. We will also continue with copper, bauxite, tin, and the added value will be much bigger from the downstreaming program. We will not stop only in minerals, but also farming and marine products. These ones, based on our calculation, will involve micro, small, and medium enterprises, farmers, fishermen. If they are provided with the access, they will produce added-value products through joint production house. Indeed, it needs consolidation. So, once again, we do not only do selling, selling raw materials. I have also told the banking sector to open funding access for them. Then, the people usually hesitate in producing because they are unsure who will be the off taker. It should be ensured.
Third, do technology transfer, although it is a basic technology, a simple one, but they should be provided with it. If we see, I take coconut as an example, coconut. Indonesia is the world’s biggest producer of coconut. There are 4.1 million farmers. We produce 16.8 million tons. If it is developed into downstreaming industry that processes coconut into semi-finished goods or finished goods, such as nata de coco, the added value may increase 3.6 times. Shredded coconut’s added value may increase to 6 times. Coconut charcoal’s added value may increase to 4.5 times, and VCO’s added value may increase to 11 times.
We should start, APINDO should aim for downstreaming for all products that are still exported in raw material form. Banks should also plan to fund downstreaming industry in the sectors that I have mentioned before.
Seaweed, beware of the seaweed. We are the world’s number two producer, and it is not difficult for us to be the number one. After I find out what is seaweed all about, it turns out that it is easy to develop seaweed [industry], to plant seaweed, it is easy. At the moment, there are only 63 thousand seaweed farmers, our annual production reaches to 10.2 million tons, and it is exported mostly in raw material form, mostly to the Philippines. If we want to make jelly powder, build the industry, the added value will grow to 3.8 times. Semi-carrageenan’s added value can reach 9.7 times; processed beverage’s added value can reach 3 times; and the last time I saw in Hannover Messe, seaweed has been turned into green energy, it can be bioethanol. Whereas, we just work on it in a limited scope, but we can be the number two in the world. If we can expand it greatly, Ladies and Gentlemen, you can imagine, it is really easy because our coastal line is the longest one in the world.
Those are the challenges that we are facing, and if we can solve the existing problems, it will be in the hands of business actors. Business actors would usually be very happy to find challenges as long as it gives benefits. If there are only challenges without any benefit, mostly they will avoid it. Challenges with benefit would attract a lot of business actors.
I think I conclude my remarks at this good opportunity.
Also, international institutions told me, ‘President Jokowi, Indonesia will have a golden opportunity in the next 13 years.’ It is due to demographic bonus and industrial downstreaming that will trigger a big leap in the next 13 years.
Therefore, I will say this over and over again, the leadership in 2024, the national leadership in 2024, the national leadership in 2029, and the national leadership in 2034 will really determine whether Indonesia can make a big leap or not. So, be wise in choosing our leader. Who? I have to say it this afternoon, who will we vote for? The sovereignty is in the hands of the people.
Thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh.
(SS/AW/MMB)