Minister of Industry Reveals Reasons for Decreasing Indonesian Industrial Competitiveness in 2023

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

JAKARTA - Minister of Industry (Menperin) Agus Gumiwang Kartasasmita said that there were two policies that caused a reduction in the competitiveness of Indonesian industry.

In fact, national industry players are considered to be increasingly optimistic in running their businesses as seen from the positive achievement of the Indonesian Manufacturing Purchasing Managers' Index (PMI) released by S&P Global at the end of 2023, which was in position 52.2 or up 0.5 points compared to November which was in level 51.7.

The first policy is the implementation of Certain Natural Gas Prices (HGBT). Minister of Industry Agus said that there are still many industrial companies that have not received the benefits of a gas price of 6 US dollars per MMBTU.

"In 2023, only 76.95 percent in West Java or only around 939.4 BBTUD will be paid at a price of 6.5 US dollars per MMBTU, the rest must be paid at the normal price of 9.12 US dollars per MMBTU," said Agus in written statement received by VOI, Wednesday, January 3.

Not only that, in implementation there are still many industrial sectors that receive gas volumes that are lower or do not match the amount that has been entered into in the contract between the industry and the provider.

"In its implementation, the HGBT policy is not in accordance with what we want, it is far from ideal in our eyes. Therefore, the chaos related to HGBT certainly reduces the competitiveness of our industry," said Agus.

The second policy that reduces the competitiveness of Indonesian industry is the lack of optimal import control. Agus assessed that Indonesia's PMI could be much higher if the implementation of HGBT went well and import controls went well.

"Because, there is an opportunity lost facing our manufacturing sector due to these two things," he said.

Apart from that, said Agus, policies need to be supported to maintain the availability of raw materials. "So, our manufacturing industrial sector continues to produce well to meet the domestic and export markets," he said.

The positive record of the Indonesian Manufacturing PMI at the end of last year is in line with the results of the Industrial Confidence Index (IKI) in December 2023 which was previously reported by the Ministry of Industry, namely reaching 51.32 points or consistent for more than 13 months since the IKI was launched, so it is still within expansion phase.

The Ministry of Industry is also targeting a growth target for the manufacturing processing industry of 5.80 percent in 2024. This figure is higher than the target of 4.81 percent in 2023.