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Jokowi calls for expanding value chain to reduce imports
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President Joko “Jokowi” Widodo (Antara/Puspa Perwitasari)
P
resident Joko "Jokowi" Widodo said on Monday that the country needed to develop its upstream industries to help reduce the manufacturing industry's dependence on imported raw materials.
He stressed that the large amount of imported raw materials had widened the current account deficit, which had increased from 3 percent of GDP in the second quarter to 3.37 percent of GDP in the third quarter, or US$8.8 billion.
“We know that Indonesia has been facing the same problem of this deficit for years, but the problem has never been addressed," he said in his speech on Monday at a CEO networking event in Jakarta.
He explained that the government had been developing upstream industries in the last two years to produce more bauxite ore, coal and palm oil to supply more domestically produced raw materials to downstream industries.
Jokowi said that even though the country exported millions of tons of bauxite ore, aluminum producers were still importing large amounts of alumina (aluminum oxide) as raw material in manufacturing aluminum products.
Alumina is chemically processed from bauxite ore.
"If we had bauxite mills, we could reduce our imports as well as provide value-added bauxite ore [exports]," he said.
Jokowi said the government was now trying to reduce oil and gas imports through a coal gasification program that would turn coal into a gaseous form for use in combination with the expanded 20 percent blended biodiesel policy. (bbn)
