Jakarta – An analyst has said that the country needs to escape the stagnant growth in its manufacturing sector, which has made it heavily reliant on primary commodities, including in its exports, to improve the economy.
"If we want to boost economic growth, we need to start focusing on how to improve the manufacturing sector to increase exports of manufacturing products," said Moekti P. Soejachmoen, head of strategic research at the Mandiri Institute, the think tank of state-owned lender Bank Mandiri.
Moekti was speaking at a recent press conference to announce the annual Mandiri Investment Forum (MIF) to be held this year from Jan. 28 through Feb. 1 in Jakarta and Yogyakarta.
According to Statistics Indonesia (BPS), growth in the manufacturing industry stagnated in the third quarter of 2018 at 5.04 percent, compared to 5.46 percent and 4.87 percent during the same quarter in 2017 and 2016, respectively.
The government thus needed to help the sector improve by granting additional incentives and introducing other policies to boost investment, Moekti said. Among the factors of bettering the investment climate were ease of doing business, human resources quality, technology and infrastructure, she added.
Moekti said Indonesian exports had been severely affected by the falling price of several commodities like coal, rubber and palm oil because of its heavy dependence on the commodities. "Meanwhile, export products from manufacturing are unable to cover the shortfall," she said.
Indonesia recorded a trade deficit of US$8.57 billion in 2018, the worst ever in its history. (das/bbn)