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Industrial sector needs special attention to revive exports: Economists
Strong processing industries are needed to increase Indonesian exports and reduce imports, economists have noted, with one suggesting that the government also review trade deals signed with other countries.
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Female employees work at a garment factory in Central Java. The government has been urged to pay special attention to the country's industrial sector to improve the trade performance. (Antara/Saptono)
Senior Indonesian economists have urged President Joko “Jokowi” Widodo to pay more attention to the development of the country’s manufacturing sector in his second five-year term to halt the decline in the country’s exports.
Didik J. Rachbini, a senior economist at think-tank Institute for Development of Economics and Finance (Indef), said the manufacturing sector, which had received little attention during the past five years, needed special treatment, so that the sluggish exports could be revived.
He said that, without proper handling of the industrial sector, it would be difficult to increase the country’s exports amid growing competition from other Asian countries. “There is a crucial need for the government to revive industry [and] increase exports in order to reduce the current account and trade deficits,” he said at a business dialogue held by outgoing Vice President Jusuf Kalla in Jakarta on Thursday.
“A lot of industries have suffered setbacks due to weak competitiveness because of inefficient bureaucracy, costly logistics and [complicated] licensing,” said Didik.
He added that industrial growth during the New Order administration of former president Soeharto had amounted to 9 to 10 percent, 7 percentage points higher than recent data.
Jokowi has been praised for his success in developing infrastructure by building toll roads not only in Java but also in Sumatra, Sulawesi and other parts of the country. During his five-year term as president, the government has also expanded a number of large seaports.
The infrastructure improvements have contributed to Indonesia’s rise in the World Bank’s logistics performance index to 46th rank out of 160 countries in 2018, up 17 places from 63rd position in the 2016 ranking.
