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KEIN points to revitalization, MSMEs as keys to growth
The advisory committee also said that intensifying trade missions to African countries and "serious structural reforms" were vital to achieving higher growth in potential GDP.
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Shipping containers fill North Jakarta's Tanjung Priok Port in this undated file photo. (Shutterstock.com/Creativa Images)
An economic advisory committee has stated that the government needs to revitalize the manufacturing industry and provide incentives to micro, small and medium enterprises (MSMEs) in order to attain greater economic growth amid the current external challenges.
Revitalizing the country's manufacturing industry was vital to addressing the structural challenges facing the economy, particularly in providing a complete value chain, said the National Economic and Industry Committee (KEIN).
Economists have often said that the country’s industrial structure had a “hollow middle”, meaning that it lacked midstream industries to connect upstream and downstream businesses.
This disconnect between upstream and downstream businesses was indicated by the large volume of raw materials, capital goods and intermediary goods that were imported for use in manufacturing.
“KEIN urges higher growth through industrial revitalization,” the committee's Hendri Saparini told reporters on Monday at a media gathering in Jakarta.
She added that the industry's incomplete value chain would result in suboptimal production and value-added products, and suggested that the government develop comprehensive and integrated policies to address the issue.
