President Jokowi Calls Steel Imports As The Cause Of The Trade Balance Deficit

President Jokowi leads the Ratas regarding the Acceleration of Increasing the Ease of Doing Business Ranking, at the Presidential Office, DKI Jakarta Province, Wednesday 12 February. (Photo by: Setkab)

JAKARTA - President Joko Widodo (Jokowi) said that steel imports so far have been one of the main sources of Indonesia's trade balance deficit and current account deficit. He said the current data shows that steel imports have entered the top three of Indonesia's total import figures.

"This is of course one of the main sources of our trade balance deficit, our current account deficit. Moreover, we can produce imported steel domestically, ”said the President while chairing a Limited Meeting at the Presidential Office in Jakarta, Wednesday, February 12.

On that occasion, the meeting discussed the availability of raw materials for the steel and iron industry. As it is known, the iron steel industry is one of the national strategic industries needed by the national industry to build infrastructure.

"Therefore, the utility of domestic steel factories is very low and the domestic steel industry is disrupted. We cannot allow this to continue, ”he said.

The Head of State emphasized the need to encourage the steel and iron industry to become more competitive, optimal production capacity, so that improvements in corporate management, updating of machinery technology, especially in the state-owned steel industry, continue to be carried out.

"But I don't think it's enough either. The report I received was that the development of the steel and iron industry was constrained by the lack of raw materials, "he said.

Therefore, there are three main things that must be done to increase the availability of raw materials for the steel and iron industries.

The first thing is to improve the ecosystem for the supply of steel and iron raw materials, secondly to immediately realize the gas price for the industry, which is US $ 6 per MMBTU (Million British Thermal Unit), the third emphasizes that there is a calculation of the impact of steel imports on quality and price competition with steel produced by domestic.

"I think we have discussed this many times and I received information from the Minister of Energy and Mineral Resources yesterday, that this will be decided soon. So I ask Presidential Decree No. 40/2016 which regulates the gas price for industry, which is US $ 6 per MMBTU to be realized immediately, "he said.