Bappenas Wants Manufacturing Industry To Contribute Up To 30 Percent To GDP

Minister of National Development Planning/Head of Bappenas Suharso Monoarfa (Photo: Doc. Antara)

JAKARTA - The National Development Planning Agency (Bappenas) wants the growth rate of the manufacturing industry to contribute to gross domestic product (GDP) of up to 30 percent.

According to the Head of the National Development Planning Agency (Bappenas) Suharso Monoarfa, the manufacturing industry can be one of the supports for Indonesia's economic growth in order to be able to get out of the middle-class income trap (MIT).

"Based on Growth Diagnostics, we are actually able to grow at 6.7-7 percent, we have such a growth potential, but we can't go there and as a result we are only at 5 percent," he quoted Antara as saying.

According to Suharso, if it can grow, Indonesia's economic potential is 6.7-7 percent, the graduation of MIT is expected to be faster. Initially, the calculation of Bappenas in 2036 Indonesia could be separated from MIT, but due to COVID-19 and so on, it would be possible to withdraw in 2038 at the earliest or 2041.

Since the 1980s, the manufacturing industry began to decline to below 20 percent. In fact, one of the requirements to become an industrial country is that there is a 20 percent contribution from the manufacturing sector to GDP.

"Well, we hope we can reach 30 percent. If manufacturing industry instruments can contribute to GDP (Gross Domestic Product or GDP) around 30 percent, the growth rate of the manufacturing industry sector must be above (growing at a higher speed) than our macro growth," said the Head of Bappenas.

The manufacturing industry developed in Indonesia must adapt to the latest issues, for example, the manufacturing industry can no longer rely on non renewable resources considering that currently talks about climate change and sustainability.

"We have to start renewable source and we have a lot of renewable resources," he said.

On this occasion, he told a meeting with the CEO of Boeing Global and his staff who invited his party to design a Boeing Design Center in Indonesia by utilizing Crude Palm Oil (CPO) as a feedstock energy as a substitute for aviation fuel.

"They don't want to say a substitute for aviation fuel, but it will be much better, environmentally friendly, and so on. But that means we have to have a high R and D (research and development) capability and so on," said Suharso.