Manufacturing Industry Exports Increased 24 Percent, Biggest Contributor To National Economic Recovery

JAKARTA - The processing industry recorded an export value during January-August 2022 of 139.23 billion US dollars, an increase of 24.03 percent compared to the same period last year.

The industrial sector contributed the most, with a contribution of up to 71.55 percent of the total national export value which reached 194.60 billion US dollars.

"Export performance from the manufacturing industry sector continues to soar, despite the risk of uncertainty in global conditions looming over the national economy," said Industry Minister Agus Gumiwang Kartasasmita in a statement in Jakarta as quoted by Antara, Sunday, September 18.

The Minister of Industry emphasized that the shipment of the manufacturing industry sector consistently contributes to the surplus of Indonesia's trade balance.

"Our trade balance is in surplus for 28 consecutive months, and this shows that government policies in economic recovery are on the right track," he said.

Referring to data from the Central Statistics Agency (BPS), the cumulative trade balance in January-August 2022 experienced a surplus of 34.92 billion US dollars or grew 68.6 percent compared to the same period last year.

"The trade balance surplus is inseparable from the industrial downstream program that we continue to run, in order to increase the added value of natural resources in Indonesia," said Agus.

The export value of nickel-derived commodities has increased significantly since the government imposed a ban on nickel ore exports starting in early 2020. This can be seen from the export value of nickel-derived commodities in January-August 2022 which reached 12.35 billion US dollars or grew by 263 percent compared to 2019 , before the enactment of the ban on nickel ore exports, which only reached 3.40 billion US dollars.

“Six years ago, our exports of nickel were only US$1.1 billion. Meanwhile, in 2021 it has reached 20.9 billion US dollars. That is, the added value of the jump is up to 19 times. Therefore, the government continues to spur the growth of the smelter industry which is proven to provide a broad multiplier effect for the national economy,” said Agus Gumiwang Kartasasmita.

BPS also noted that the processing industry was the largest contributor by sector, with exports reaching US$19.79 billion in August 2022. Shipments from the manufacturing sector grew by 13.49 percent when compared to the position value in July 2022.

"The increase in exports was driven by commodities such as palm oil, steel, electrical equipment, vehicles and their parts, as well as nickel derivatives," Agus added.

Until now, the Ministry of Industry has focused on spurring the downstreaming of agro-based industries, mineral mining materials, as well as oil and gas and coal.

According to him, Indonesia has received many benefits from implementing downstream policies, including generating added value, strengthening industrial structures, providing jobs, and providing business opportunities.

"Through downstreaming, Indonesia no longer sells raw goods, but has processed both semi-finished and final products," said Agus Gumiwang Kartasasmita again.