Jakarta – Finance Minister Bambang Brodjonegoro has called on banks to be proactive in helping the manufacturing sector grow amid the economic slowdown by providing long-term financing.
Bambang said the banking industry should play a bigger intermediary role in the economy to prevent a further slowdown. However, banks should also strengthen resilience as commodities prices were still under pressure in the global market.
"As long as prices are low, it will be difficult for companies to pay off their liabilities or to take out more loans," he said at the 2016 Banking Service Excellence Awards in Central Jakarta on Thursday.
The country, he continued, should reduce its reliance on the commodities sector by transforming commodities-based businesses into natural resources-based manufacturing businesses that could act as a locomotive to drive national economic growth.
Amid the transformation, banks would have pivotal roles to play in providing more affordable funds for companies to enter the manufacturing sector. This manufacturing sector has room to expand, Bambang said, and has the potential to be a new engine of growth.
The manufacturing industry in Indonesia contributes only 21 percent to gross domestic product, while in developed countries the industry contributes more than 30 percent. (ags)