The economic transformation from primary sector industries to value-added industries (downstream) needs to be carried out continuously in order to encourage investment through priority sectors, the sector having added values.
Efforts to accelerate the downstream industry means to increase the added value of a product, thus finally having impact on national economic growth, according to Chairman of Indonesian Logistics and Forwarders’ Association (ALFI/ILFA) Yukki Nugrahawan Hanafi.
“ALFI totally supports the government so that the downstream program or economic transformation from primary sector industries to value-added industries can run as expected. The point is that we have to focus on the downstream industry,” Yukki said in a press statement this morning (Wednesday, December 1, 2021).
The export-oriented labor-intensive industries, including the pharmaceutical and medical devices, electronics and automotive industries need to be encouraged, he said. In addition, the energy-related industries, especially the new and renewable ones, infrastructure and mining having added values must be also on top concern.
Based on data from the Ministry of Investment (Investment Coordinating Board/BKPM), the investment target for 2020-2024 period is contracted to Rp 4,983.2 trillion, increasing 47.3% from the total realization of 2015-2019 period which reached Rp 3,381.9 trillion.
“We can reach the target if we can focus to realize the downstream industry programs. And this is in line with the government programs,” he said.
ALFI also appreciates the efforts of the Minister of Investment/Head of BKPM Bahlil Lahadalia in spurring investment in Indonesia and in accelerating the downstream industry as well.
Based on BKPM data, he added, the investment target in 2021 is IDR 900 trillion, and the realization during January-September 2021 has reached IDR 659 trillion.
The world’s economic turmoil in 2008 – 2019 came from the financial, energy, and trade sectors. But, these crises did not really put pressure on the supply and demand, he said.
However, it is different with the case of covid-19 outbreak crisis. Amid the Covid-19 outbreak which is originated from the health sector, the economy has crippled because it suppresses the performance of the supply and demand.
“This condition is getting worse as the world has no experience in handling the pandemic of Covid-19,” said Yukki
As the report said, Minister of Industry (Menperin) Agus Gumiwang Kartasasmita earlier revealed that the government was optimistic that the implementation of the industrial downstream policy would maintain the strength of the national economy, so that it would not be easily swayed in the midst of fluctuations in commodity prices and did not depend on external sources.
Accelerating the downstream industry is now so urgent, according to Agus Gumiwang, as the pandemic has disrupted the global supply chain.