Airlangga: Industrial Areas Become Main Motor to Chase 8 Percent Economic Growth

Coordinating Minister for Economic Affairs Airlangga Hartarto (Kemenko Ekonomi)

JAKARTA - The industrial sector has a strategic role as one of the important engines driving national economic growth through increased investment, job creation, increased added value, and strengthening competitiveness.

In supporting the achievement of the economic growth target of 8 percent, the Government continues to strengthen the development of integrated industrial areas with the development of infrastructure and connectivity, as well as being adaptive to the development of downstream, energy transition, and digital transformation.

Coordinating Minister for the Economy Airlangga Hartarto said that since its establishment in 1988, the Indonesian Industrial Area Association (HKI) has developed into a strategic partner of the Government in national development.

"If we know, from Bekasi to East Indonesia, we have built what is called the North Java Corridor. The North Java Corridor is filled with industrial areas," he said in his closing remarks and directions at the 38th Anniversary of the Indonesian Industrial Area Association (HKI), as part of the series of events Business Forum and National Working Meeting (RAKERNAS) XXV HKI, quoted Sunday, August 2.

The development of the industrial area is reflected in the existence of 129 industrial areas spread across 24 provinces with a total land area of around 170 thousand hectares.

Various industrial areas have become locations for around 10,400 manufacturing companies and absorb around 4.5 million workers.

The government is also continuing to develop industrial areas supported by the development of Special Economic Zones (KEK) as part of efforts to expand new economic growth centers in various regions of Indonesia.

"Industrial areas are the driving force of the nation, creating jobs, and improving welfare," said Coordinating Minister for Economic Affairs Airlangga.

In the midst of increasingly dynamic global investment competition, Indonesia also has great opportunities to continue to strengthen its position as one of the main investment destinations.

Airlangga said that a number of competing countries are beginning to face various limitations, ranging from increasing labor costs, increasingly limited land availability, to energy needs.

According to him, this condition is an opportunity for Indonesia to continue to increase competitiveness and attract quality investments.

Airlangga also revealed the results of a survey by the Japanese trade promotion agency or Japan External Trade Organization (JETRO) which showed that about 70 percent of companies investing in Indonesia recorded profits and were the highest compared to a number of other countries.

Along with technological developments, industrial areas also need to be more adaptive to the fast-moving digital transformation.

The development of artificial intelligence or Artificial Intelligence (AI) has increased the need for quality data and digital infrastructure, especially data centers.

The government has anticipated this development, among others, through the initiation of the ASEAN Digital Economy Framework Agreement (DEFA) which includes the development of digital and AI ecosystems and is expected to further strengthen the integration of digital economies in the ASEAN region.

Airlangga explained that the increased demand for data centers opens up new investment opportunities for Indonesia, especially with the support of land availability, energy, and the potential for the development of renewable energy.

He said the development of data centers requires adequate electricity, renewable energy, water, land, and connectivity.

According to Airlangga, Indonesia's opportunities in the sector in the future are very large so that they need to be optimally utilized, including through accelerating the strengthening of electricity connectivity and the provision of green energy.

Furthermore, Airlangga emphasized that the Government would continue to encourage the development of industrial areas so that industrial activities would be more organized, have a strong ecosystem, and be able to increase their contribution to national economic growth.

He added that the government also continues to monitor various challenges faced by industry players while encouraging the resolution of various investment obstacles.

"So the government hopes that with the industrial area, this will certainly become a more organized area and the ecosystem will be better maintained," said Airlangga.

On the same occasion, HKI Chairman Akhmad Ma'ruf Maulana conveyed that industrial area actors continue to be committed to bringing and realizing investment in various regions of Indonesia.

However, the Government's support is still needed in resolving various obstacles in the field so that the investments that have entered can be realized immediately.

Through RAKERNAS XXV HKI, various inputs and problems faced by industrial area actors are collected as part of efforts to strengthen collaboration between the Government and the business world and encourage debottlenecking policies.

Regarding various problems that are still faced in the development of industrial areas, Spokesperson for the Coordinating Ministry for Economic Affairs Haryo Limanseto emphasized the Government's optimism in facing various challenges that occur.

"As stated by the Coordinating Minister, what is the problem today is indeed a PR that needs to be resolved, and many countries are also facing the same thing. Therefore, the government will continue to debottlenecking policies and strengthen collaboration with stakeholders so that it can be immediately overcome. The government remains optimistic that these various challenges will definitely be resolved," added Haryo.