Economist Says Indonesia's Manufacturing Industry Is Still The Strongest In ASEAN

Illustration (Photo: Doc Antara)

JAKARTA - Universitas Brawijaya economist Wildan Syafitri said Indonesia's processing industry (manufaktur) is still the strongest in the Southeast Asia (ASEAN) region, considering that Indonesia's total added value (manufacturing value added/MVA) reached 255 billion US dollars.

"The achievement of the Indonesian manufacturing industry sector should be appreciated because this is a positive achievement considering that in a crisis situation, Indonesia can actually increase the efficiency of the manufacturing industry," he said as quoted by ANTARA, Thursday, July 25.

He explained, in the last five years the MVA Indonesia data released by the World Bank has shown a significant increase.

In the latest data released, Indonesia's manufacturing added value is far above other ASEAN member countries, such as Thailand and Vietnam, where the value of the MVA is only half that of Indonesia, which is 128 billion US dollars each, and 102 billion US dollars.

Meanwhile, in terms of contributing to Gross Domestic Product (GDP), the non-oil and gas processing sector in the first quarter of 2024 became the largest contributor, namely 17.47 percent with a growth of 4.64 percent.

On the export side, the delivery value of non-oil and gas processing industrial products in the first semester of 2024 reached US$91.65 billion or equivalent to 73.27 percent of the total national exports, with employment of 18.82 million people.

"We can interpret this positive trend as an increase in industrial efficiency. This condition is also a reflection of the industrial power in contributing to the Indonesian economy as a reflection and an overview of the extent to which industrial power in the national economy is," he said.

He said the performance was encouraged because Indonesia could take advantage of the supply chain crisis due to the Russia-Ukraine war, the role of infrastructure development, investment, and increased human resource capacity (HR).

He specifically paid attention to Indonesia's response in dealing with the import conditions of cheap goods that stormed the domestic market.

"If this condition continues, it will gradually kill domestic industries. Domestic industries need to better adapt to market demand trends and government regulations need to protect domestic industries from this imported attack," he said.

Previously, the Minister of Industry (Menperin) Agus Gumiwang Kartasasmita said the added value of manufacturing against Indonesia's (Manufacturing Value Added/MVA) economy reached 255 billion US dollars which made Indonesia's manufacturing value move up to 12th position globally.