The Ministry Of Industry Disbursed The Terrible Impact Of The Iran-Israel War On The National Industry

JAKARTA - The Ministry of Industry (Kemenperin) revealed that a number of impacts were due to the geopolitical conflict between Iran and Israel. This impact stems from the potential increase in energy prices, reducing the availability of raw materials that disrupt the global supply chain to the threat of economic uncertainty.

Deputy Minister of Industry (Wamenperin) Faisol Riza said, when Iran threatened to close the Strait of Hormuz, it was a waterway that was traversed about 20 barrels of crude oil and fuel per day (bpd) globally would threaten the sustainability of the national industry.

"This energy is a source of production in the industrial sector. This condition also threatens the continuity of our national industry, such as labor-intensive industries, textiles, household electronics to components or optics which are currently facing a decline in export demand," said Faisol at a Working Meeting (Raker) with Commission VII at the Parliament Complex, Senayan, Jakarta, Wednesday, July 2.

"The decline in export demand is also not without reason. The global tensions we face are not only on the production side, but also export groups experiencing big challenges," he continued.

According to Faisol, geopolitical tensions in the Middle East have also created global energy trade path instability.

"Geopolitical global also shows uncertainty over the flow of foreign investment into Indonesia. This pressure risks driving capital outflows, especially due to the increasingly stringent response of monetary policy for developed countries," he said.

In a situation like this, according to Faisol, investors tend to be careful and create pressure on economic and industrial stability in the country.

In addition, Faisol said, the trade war between the United States (US) and China also worsened the condition of the domestic industry.

The reason is, many Chinese products that do not get market access to the US actually flood the domestic industrial market at a fairly cheap price.

"Domestic products are being pressured by Chinese imported goods, which today have lost access, lack access to their large US market," he said.

Therefore, he continued, the government needs to take strategic steps to deal with these conditions.

"The government needs to take strategic steps to protect the domestic market while taking advantage of opportunities for export expansion that are open in the global market," he concluded.