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Indonesia: New industry minister to reduce imports of consumer goods
The newly appointed Industry Minister Agus Gumiwang Kartasasmita is to focus on the development of industrial zones and to increase exports of manufacturing goods during his five-year working term.
In addition to increasing exports, he said he also plans to reduce imports of consumer goods and to promote import-substitution industrialization to reduce the country’s current account deficit, which has continued to increase in recent months because of the country’s sluggish exports.
“The most important thing is that we should reduce the current account deficit so we will need to substitute for imported products,” Agus told reporters in his address during the transfer of duties ceremony at his new office in Jakarta .
Indonesia’s exports dropped 5.74 percent year-on-year (yoy) in September to US$14.1 billion, marking an 11th consecutive month of yoy declines, BPS reported. Imports, meanwhile, were down 2.41 percent yoy in September at $14.2 billion, resulting in a trade deficit of $160 million.
Agus said he is planning to develop more economic and industrial areas and also looking to strengthen inter-ministerial coordination in a bid to remove bureaucratic hurdles in executing the government’s programs.
“The President [Joko ‘Jokowi’ Widodo] has given me the task of immediately completing the B100 [100-percent palm oil-based biofuel project],” said Agus upon being asked about his short-term plans. The former social affairs minister said that he was also tasked by the President to reduce imports of consumer goods.
Agus replaced Airlangga Hartarto, who was appointed coordinating economic minister.
Economists said they believe the government’s lack of focus on industrial development was the reason for the decline of the contribution of the manufacturing sector to the country’s gross domestic product (GDP), which was almost 30 percent in 2002.
According to Statistics Indonesia (BPS) data, the manufacturing sector’s GDP contribution fell to 19.52 percent in the second quarter of this year, as the sector only grew 3.5 percent annually, below GDP growth of 5 percent.
President Jokowi’s administration has struggled to boost exports in a bid to jack up the country’s sluggish economic growth amid lower commodity prices and heightening trade tensions that have disrupted global demand.
Source: https://www.thejakartapost.com/news/2019/10/24/new-industry-minister-to-reduce-imports-of-consumer-goods.html