Bank Indonesia: Downstream Manufacturing Sector Is Important For Sustainable Growth

Illustration (Photo: Doc. Bank Indonesia)

JAKARTA - Bank Indonesia stated that solid and sustainable economic growth is the main requirement for Indonesia to transform towards an advanced economy.

BI Deputy Governor Dody Budi Waluyo said this requires the support of a healthy current account structure, supported by a strong manufacturing sector.

"Downstreaming is part of efforts to develop the manufacturing industry by creating a strong and value-added industrial structure," he said in a series of G20 meetings, Monday, February 14.

According to Dody, this method will encourage an increase in exports of high added value and be integrated with the global value chain while reducing imports.

"Downstreaming can strengthen domestic linkages with supporting industries from other regions that encourage more inclusive development," he said.

Similarly, Head of the BI Department of Economic and Monetary Policy Solikin M. Juhro explained that the central bank is trying to maintain the stability of the rupiah value to support sustainable economic growth.

"This strategy is clearly a policy mix that synergizes with the government's structural reforms," he said.

In his notes, there are various challenges, both the impact of downstreaming on the economy that needs to be expanded, as well as challenges related to production factors, as well as regulations regarding the implementation of green industries.

"There are several challenges that need to be observed, such as green financing, the implementation of low-carbon technology, as well as the necessary technical assistance and training," he said.

Meanwhile, Senior Economist of the Asian Development Bank, Henry Ma, conveyed the importance of increasing the complexity of export products.

"Government support is very much needed to be able to create a supportive investment climate and the involvement of the private sector and discuss the necessary incentives," he said.

For information, starting today, Bank Indonesia is a series of second meetings at the Finance and Central Bank Deputies Meeting (FCBD) which will be held from 14 to 19 February 2022 in Jakarta. This seminar aims to increase awareness of the importance of downstreaming mineral resources. , discuss the potential and emerging challenges, and formulate policy recommendations.

BI itself is said to be committed to supporting government programs in the development of Indonesia's manufacturing sector and downstream industry development, one of which is through organizing this manufacturing-themed seminar.