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Industry Ministry slams Trade Ministry policy for manufacturing woes
The Industry Ministry continues to point to a recent Trade Ministry regulation for the country’s weakening manufacturing PMI, even as other Asian peers saw stronger performance in the May-June period.
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A worker produces sarong fabric on Jan. 4, 2019 in a factory at the Majalaya textile industry hub in Bandung regency, West Java. (Antara/Raisan Al Farisi)
T
he Industry Ministry has blamed regulatory issues as a major factor of the country’s weakening industries, as indicated by the manufacturing purchasing managers’ index (PMI) dropping to a 13-month low of 50.7 in June.
Specifically, it pointed to the eased import requirements in Trade Ministry Regulation No. 8/2024 for causing a drop in optimism among local business players.
According to the Industry Ministry, that regulation could lead to imported products flooding the domestic market while local players were struggling to maintain their businesses due to lower export demand, resulting in waves of layoffs.
“The industrial sector is in an alarming condition right now. That was caused by weakening growth in new orders due to global market conditions, trade restrictions from other countries and unsupportive domestic regulations,” Industry Ministry spokesperson Febri Hendri Antoni Arif said on Monday.
Febri said the government needed to revert to the stricter import rules in Trade Ministry Regulation No. 36/2023 to prevent more damage, as well as impose “safeguard measures” and antidumping duties on certain commodities.
His choice of words suggests the ministry is confident that its proposed duties would comply with the requirements of the World Trade Organization, which defines safeguard measures as “emergency actions with respect to increased imports of particular products, where such imports have caused or threaten to cause serious injury to the importing [member country’s] domestic industry”.
Febri also pointed out that Indonesia saw weakened manufacturing performance while other Asian countries such as China, India, South Korea, Thailand and Vietnam saw stronger industrial growth.
