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Made-in-Indonesia products see major uptake in government procurement: LKPP

Jakarta Globe - May 16, 2024

Anisa Fauziah, Jakarta – President Joko "Jokowi" Widodo's call to reduce imports in government procurement has effectively increased the use of domestic products.

According to Irwan Herniwan, the Chief Secretary of the Government Goods and Services Procurement Policy Agency (LKPP), over the past year, the government increased the utilization of made-in-Indonesia products in public procurement by 32.3 percent.

In 2022, the value of products made in Indonesia used in government procurement was Rp 440.2 trillion, which rose to Rp 582 trillion in 2023.

"The affirmative policies to foster the use of domestic products and reserve the government procurement market have positively impacted various economic aspects," Irwan said.

Furthermore, Irwan detailed the increase in procurement spending for micro and small enterprises by the government. In 2023, the realization of this spending increased to Rp 275.7 trillion, equivalent to a 52.1 percent increase from the previous year.

In 2019, President Jokowi criticized his ministries and public agencies for relying too heavily on imported goods for procurement instead of using made-in-Indonesia products. He highlighted that Indonesia was still importing basic items like hoes from China, which local craftsmen could easily produce. Jokowi warned that excessive imports could cripple local industries and lead to job losses.

The president instructed the LKPP and the Government Planning Agency (Bappenas) to encourage local small and medium enterprises (SMEs) to produce hoes and other simple tools in high domestic demand.

Indonesia has been witnessing a positive trade balance for four years in a row, with India being the biggest contributor to the surplus in April, according to the Central Statistics Agency (BPS) on Wednesday.

The agency reported that Indonesia registered a $3.56 billion surplus in April. Indonesian exports in April 2024 were recorded at $19.62 billion, an increase of 1.72 percent year-on-year, driven by rising oil and gas exports in line with increasing global energy prices.

Meanwhile, imports in April 2024 were recorded at $16.06 billion, up 4.62 percent year-on-year, driven by increased imports of key commodities, including electrical machinery/equipment, plastics and plastic articles, organic chemicals, and sugar and confectionery.

Source: https://jakartaglobe.id/business/madeinindonesia-products-see-major-uptake-in-government-procurement-lkp