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Service sector demands more attention
Statistics Indonesia data shows that the sector grew at an average of 7.1 percent each year between 2010 and 2017, which not only surpassed the annual average expansion of manufacturing (4.4 percent) and agriculture (3.7 percent) but also of the economy as a whole (5 percent).
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Teachers guide students in using smartphones in the qualification for the mathematics competition using gasing, a method aimed at making math easy and fun, at SMK 1 state senior high school Leuwiliang in Bogor, West Java. (The Jakarta Post/Dhoni Setiawan)
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ndonesia’s service sector continues to suffer from a lack of attention from the government, despite its significant contribution to the country’s economy.
Statistics Indonesia data shows that the sector grew at an average of 7.1 percent each year between 2010 and 2017, which not only surpassed the annual average expansion of manufacturing (4.4 percent) and agriculture (3.7 percent) but also of the economy as a whole (5 percent).
Pushing service exports is necessary for Indonesia to meet its goal of moving beyond a commodity-driven economy by 2045 and of stemming a billion-dollar current account deficit as soon as possible.
“The era of oil and wood is over. The era of natural resources is also almost over,” President Joko “Jokowi” Widodo said in Bali earlier this month. He has also put human development at the core of the government’s draft 2020 state budget at a time when the country’s exports, mainly consisting of commodities, and investment have been hit by slowing demand as a result of global economic uncertainties.
Indonesia’s service exports increased incrementally over the past three years to US$13.49 billion in the Jan-June period this year, up 15.6 percent from the same period in 2017, according to Bank Indonesia’s latest quarterly balance of payments report.
However, the export growth is offset by service imports that bumped up 16.9 percent over the same time. Imports in this year’s first two quarters hit $17.33 billion, higher than the $14.83 billion booked in Jan-June 2017.
Nearly half of the service exports were contributed by travel services while transportation, particularly shipping, was the largest burden on imports.
