Minister Of Industry Agus Denies Indonesia Alami Deindustrialization, Here's The Reason

Minister of Industry Agus Gumiwang Kartasasmita (Photo: Doc. Antara)

JAKARTA - Minister of Industry (Menperin) Agus Gumiwang Kartasasmita dismissed the issue of Indonesia being de-industrialized. This is because the condition of all manufacturing industry sectors in Indonesia will strengthen again in July 2023.

It is known that the results of the Indonesian Manufacturing Purchasing Managers Index (PMI) released by S&P Global showed an index in July 2023 of 53.3, an increase of significant compared to the previous month which touched the 52.5 level.

Indonesia's Manufacturing PMI in July also surpassed the Malaysian Manufacturing PMI (47.8), Vietnam (48.7), the Philippines (51.9), Taiwan (44.1), China (49.2), Japan (49.6), South Korea (49.4), the United States (49.0), and Germany (38.8).

"Some of these indicators show that Indonesia has not experienced deindustrialization. This is because industrial growth is still good, at an expansive level. Contribution to GDP is also still the highest compared to other sectors, including contributions from exports and taxes," said Minister of Industry Agus through an official statement received by VOI, Tuesday, August 1.

Minister of Industry Agus said the government was determined to continue to create an increasingly conducive business climate for industry players in the country. One of them is the acceleration of the development of an electric-based motor vehicle ecosystem.

A number of decisions have also been made, starting from evaluating the requirements for purchasing electric motorcycles, relaxation of regulations, and incentives, so that Indonesia is more competitive among competing countries in developing the electric vehicle ecosystem.

First, the government evaluates the government assistance program that has been rolled out. Related to the requirement or conditions previously stipulated as a condition will be abolished.

"So, later the government will receive assistance for the purchase of an electric motorbike based on a NIK or KTP. One ID card or one NIK can only buy one electric motorbike," said Agus.

The government will also prepare regulations to provide incentives for potential investors who will bring electric car investment to Indonesia.

"We want the fiscal incentives to be competitive compared to our competing countries. For example, we can zero the CBU (completely built up) tax later, we can zero the VAT later. We are formulating this together with the relevant ministries," said Agus.

He is optimistic that through this strategic policy, the province will be able to increase the positive expectations of industry players for the economic condition of Indonesia, so that they have the opportunity to attract new investment into the country.

"The government will continue to encourage economic competitiveness, especially at a time when the Indonesian Manufacturing PMI continues to record expansion," added Agus.

Furthermore, he said, strengthening high domestic demand also raised national manufacturing production activities. This makes several companies recruit new workers in large quantities.

According to Agus, the increase in sales driven by domestic demand is the main sentiment for the positive prospects for the economy going forward.

"Therefore, we remain committed to continuing to carry out the program to Improve the Use of Domestic Products (P3DN)," he added.