Coordinating Ministry For The Economy: Manufacturing Sector Is An Option To Save Middle Class

Photo: Doc. Antara

JAKARTA - Expert Staff to the Coordinating Minister for Economic Affairs of the Republic of Indonesia, Raden Pardede, stated that the manufacturing sector is an option that can save the middle class.

"The problem is that in the middle class, the pillars are formal and manufacturing sectors with relatively high productivity," said Raden at the Prabowo-Gibran Government Era Economic Development Optimism seminar in Jakarta, quoted from Antara, Thursday, August 29.

According to him, the decline in the middle class began after the COVID-19 pandemic. During that period, the economy also experienced a crisis.

While the assistance provided by the government is more targeted at poor and vulnerable classes, on the other hand, the upper class tends to be relatively safe. Meanwhile, the middle class is relatively affected.

At the same time, continued Raden, job creation in recent years has occurred more in the informal sector and less productive sectors.

For example, online motorcycle taxi work that focuses more on service rather than production.

"In the future, we must enter a more productive and formal sector, in this case manufacturing," he said.

Intermediate class participation in the manufacturing sector is considered to improve the quality of manufacturing products. If this happens, manufacturing productivity can work and the middle class has adequate income to support their purchasing power.

"So, the economy will move on its own because the purchasing power is strong to buy our goods, and the manufacturing is also working," said Raden.

Previously, the Government provided additional incentives for Government-Borrowed Value Added Tax (PPN DTP) and a quota for subsidies for Housing Financing Liquidity Facilities (FLPP).

Coordinating Minister for Economic Affairs Airlangga Hartarto said the two programs were aimed at strengthening the middle class which was considered a driving force for the economy.

He defines the middle class as a society with a consumption pattern where the largest expenditure is usually in terms of the sector for food and beverages, followed by housing, health, education, to entertainment or the service sector.

Currently, the housing sector is one of the second largest expenditures for the middle class so that government policies in this sector become important.