Minister of Industry   Airlangga Hartanto - Photo by the Ministry of Industry

JAKARTA (TheInsiderStories) – The industrial sector contributed significantly to the growth in value of investments in the first half (1H) of 2018, said one senior official on Monday (27/08). Total investment of the manufacturing sectors reached Rp122 trillion (US$8.41 billion) over 10,049 projects in 1H 2018, accounted for 33.6 percent of the total national investment value of Rp361.6 trillion.

“We are actively encouraging investment in the industrial sector. Through the construction of the plant, of course, brings a multiplier effect on the national economy such as the increase in the added value of domestic raw materials, employment and foreign exchange earnings,” said Industry Minister Airlangga Hartanto in a written statement.

The ministry noted, during the 1H of 2018, domestic direct investment from the industrial sector stands at Rp46.2 trillion. Meanwhile, foreign direct investment (FDI) from the industrial sector is able to penetrate through $5.6 billion.

The highest domestic contribution from the manufacturing sector, including the food industry amounted to 47.50 percent (Rp21.9 trillion), chemical and pharmaceutical industries 14.04 percent (Rp6.4 trillion), as well as industrial metals, machinery, and electronics 12.70 percent (Rp5.8 trillion).

Furthermore, the highest FDI contribution of the manufacturing sector, which among other industrial metals, machinery, and electronics amounted to 39.69 percent ($2.2 billion), followed by the chemical and pharmaceutical industry 18.84 per cent ($1.1 billion), as well as the food industry 10.41 percent ($586 million).

“This investment we believe will strengthen the structure of the industry in the country and can be a substitution of imported raw materials,” said him.

Therefore, Hartarto stated, the government has worked to create a climate conducive business that spurred the increase of investment in Indonesia, whether it forms new investments and business expansion or expansion.

The current government, he added, has issued several policies to better facilitate the influx of investment both from within and outside the country. The strategic steps which include optimizing the use of fiscal facilities such as tax holiday, tax allowance and exemption from import duty import of capital goods or raw materials.

“In fact, our ministry has proposed a tax deductible super scheme to industrial activities and vocational innovation,” he said.

Furthremore, he continued, the government improve both the licensing procedures carried out at central and regional level. Currently, the licensing procedures have been prepared using the Online Single Submission mechanism. In addition, the ministry accelerated to increase the competence of human resources industry through training programs and vocational education.

Hartarto admitted that efforts to attract foreign investment into one of 10 national priority step in entering the fourth industrial revolution era accordance roadmap Making Indonesia 4.0. This could encourage the transfer of technology to local companies.

“To increase investment, Indonesia will actively engage global manufacturing company, choose the world’s top 100 manufacturing companies as the leading candidate and offer attractive incentives, and dialogue with foreign governments to collaborations national level,” he stated.

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