Ministry to update master plan
to boost RI industry sector
Source: Jakarta Post
The Industry Ministry is set to revise the country’s industrial masterplan, with export-oriented businesses and manufacturing that uses locally produced raw materials to be given more state support.
According to Industry Minister Saleh Husin, those two types of industry are most able help the country gradually reduce its dependence on imported raw materials and boost the supply of foreign exchange.
“Of the 10 priority industries, I think industries that rely mostly on local raw materials and those that are export-oriented, such as food and beverages, pulp and paper and smelters, are ready to take off,” Saleh said on Friday.
At the same time, he acknowledged that the government could not reduce other industries’ dependence on imported raw materials.
The revision, Saleh added, was part of efforts to create a more comprehensive set of policies and build synergy with other ministries and state institutions.
The masterplan, known as the National Industry Development Masterplan (RIPIN), has been formalized into an Industry Minister regulation that sets 10 priority industries for the 2015-2035 period in a bid to enlarge industry’s role in the national economy.
For the revision process, the ministry is seeking insight from various stakeholders, including manufacturers and analysts.
“We will hold routine meetings to receive input and ideas, so that we can develop a more mature set of policies that will be synchronized with other ministries and institutions to support our local industries,” Saleh said after a meeting with business owners, adding that the revision had yet to be formulated.
The administration of President Joko “Jokowi” Widodo is continuing with the RIPIN introduced by the previous administration of Susilo Bambang Yudhoyono, which divided 10 priority industries into three categories — backbone, supporting and upstream.
The backbone industries comprise food; pharmacy, cosmetics and medical devices; textiles; leather, footwear and miscellaneous; transportation equipment, electronics and telematics; and power plants.
The masterplan further designates capital goods, components and auxiliary materials as supporting industries, while the upstream category includes agro-business; basic metals and non-metallic minerals; and basic chemicals.
The RIPIN visualizes Southeast Asia’s largest nation becoming an innovative and technology-based industrial country in the long term, with a strong, healthy, fair and competitive domestic industry structure.
Under the masterplan, growth of the country’s non-oil and gas industries is targeted to reach 6.8 percent this year, rising to 8.73 percent and 9.53 percent by 2020 and 2025, respectively.
Domestic economic growth fell to 4.7 percent in the first quarter of this year from 5.2 percent in the same period last year, with overall exports declining 11.84 percent to US$64.72 billion by the end of May.
During Friday’s meeting, Core Institute executive director Hendri Saparini said the current RIPIN did not set a clear goal of boosting the country’s manufacturing industry, which, he argued, should be made Indonesia’s economic engine, pointing out that before the 1998 economic crisis, manufacturing contributed 60 percent of the country’s total exports.
“The Jokowi administration has pledged to reverse the current state of affairs, in which 60 percent of our exports are primary raw materials. We should take note that many manufacturing countries have clear sets of policies and objectives that fully support their priority industries,” Hendri said -