Minister of Industry Airlangga Hartarto Accompanied by the ministry's officials in the 2018 Final Press Conference in Jakarta (12/19) - Photo by the ministry

JAKARTA (TheInsiderStories) – Indonesia has identified improving performance of export-oriented industries as one of their main goals in coming years to improve the trade deficit. At present, industrial exports account for 72.28 percent of total national exports.

Based on the industry ministry data, the export value of the non-oil and gas processing industries to the end of 2018, is expected to reach US$130.74 billion. This achievement has been greater than the previous year, which amounted to $125.10 billion.

The growth is supported by food and beverages (8.71 percent), metal goods, computers, electronics, machinery and equipment (4.02 percent), transportation equipment (3.67 percent), and chemicals (3.40 percent).

The non-oil and gas processing industry sector in 2018 contributed 17.66 percent to the total national export. This is the biggest contribution compared to other sectors.

To support the planned, the government is designing a policy to provide fiscal incentives that could trigger the industry to more actively export. He said, the potential export from the country are the automotive sector, clothing, textile, footwear industries, and the food and beverage industry.

Hartarto revealed, industrial growth can be stimulated through direct investment in labor-intensive sectors. In addition, the government aims to be attractive and provide ease of doing business. Revisions to the negative investment list are also expected to expand the opportunities for investment flows.

The investment in the non-oil and gas industry is estimated at Rp226.18 trillion ($15.60 billion), with total workforce in the industrial sector has been absorbed by 18.25 million people. This year, manufacturing industry investment weakened to Rp226.18 trillion, or decreased 18.7 percent from previous year’ at Rp274.8 trillion.

On the other hand, to stimulate the downstream palm oil processing sector, the government has set a mandatory B-20 policy to increase the growth of the domestic market by 6.5 percent and grow the export market by 7.4 percent.

Presently, the ratio of downstream product exports in the crude palm oil industry is 80 percent compared to upstream products with investment reaching $1.2 billion and employing a total of 2,000 people as well as 32,000 indirect workers.

While, next year, biodiesel supply is targeted to reach 6.1 million tons, supported by a national biodiesel plant with an installed capacity of 12.75 million kiloliters.

Meanwhile, the cocoa processing industry enjoyed a surplus of $770 million. From January-September 2018, the increase of cocoa butter exports was 19 percent and 18 percent for cocoa powder. The growth of the sugar industry was supported by the construction of three new sugar factories with a total capacity of 35,000 TCD.

In the coming year, the projected growth of the non-oil and gas industry is 5.4 percent, with the food and beverage industry (9.86 percent), machinery (7 percent), textiles and apparel (5.61 percent), and leather goods from leather and footwear (5.40 percent).

The government will also intensify it’s implementation of vocational education and training programs to improve the competence of human resources. With a budget of Rp1.78 trillion, the Ministry organizes competency-based industrial vocational education towards dual systems, as well as building community polytechnics or academies in industrial estates.

US$1: Rp14,500

Written by Daniel Deha, Email: theinsiderstories@gmail.com

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