JAKARTA - Trade Minister Muhammad Lutfi said that trade is one of the sectors most affected by the enactment of large-scale social restrictions (PSBB) in 2020.
Lutfi said that trade contracted in the third quarter by 5.03 percent on an annual basis or year on year (yoy). This was followed by the transportation and warehousing sectors, which fell 16.70 percent on an annual basis.
"PSBB was successful but trade fell. This means that trade and stocking were disrupted. The accommodation and food and beverage sector also fell and this shows that people are not going anywhere," he said, during a webinar on 'Accelerated Economic Recovery', Tuesday, January 26.
Indonesia's foreign trade performance throughout 2020 also faces serious challenges despite printing a surplus of US $ 21.74 billion, even the highest since 2011. According to Lutfi, this year's performance is also concerning because of the pandemic occurring around the world.
Lutfi said there was a deep correction in the import performance which was dominated by the raw and auxiliary materials group because some countries also closed access to entry and exit from their country. As a result, the flow of goods was disrupted.
"If you look deeper, there is a weakening because 70.2 percent of imports are supporting raw materials. This means that if imports drop 17.34 percent, I am afraid there will be a weakening in the production sector for consumption in the country," he said.
According to Lutfi, in order to survive this year, several things must be done. First, it must improve the structure of production and consumption in the country. Moreover, Indonesia's consumption in the GDP formula is more than 50 percent.
"This means, if consumption is disrupted or production is disrupted or production and consumption is disrupted, our economic growth in 2021 will be directly affected. So how do we have to improve the structure," he explained.
Therefore, Lutfi is committed to ensuring the flow of goods in 2021 so that production and consumption activities can resume their growth.
In this case, Lutfi will ensure 70.2 percent of imports can enter smoothly. On the other hand, he hopes that there will be incentives that will boost people's purchasing power.
"If the industry is ready, we must also prepare for consumption to run. This is one thing I have to talk about not only in the trade sector but also in industry, and then most importantly also in the place of the finance ministry. Because we need incentives. Not only. financial form but also trust incentives to the market for people to buy again, "he explained.
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