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Gov't spends Rp 651.8 trillion on local products

Jakarta Globe - December 14, 2022

Arnoldus Kristianus, Jakarta – The government and state-owned enterprises, or SOEs, have spent a total of Rp 651.8 trillion or about $41.8 billion worth of local products for their procurement needs so far this year, according to the Coordinating Ministry for Investment and Maritime Affairs.

This far exceeded the government's goal of spending Rp 400 trillion on homegrown products this year. The government also said it had spent 15 percent of the money on products made by local micro, small and medium enterprises (MSMEs).

Chief Investment Minister Luhut Binsar Pandjaitan attributed the high domestic product spending to the Bangga Buatan Indonesia ('Proudly Made in Indonesia') campaign. Luhut said spending Rp 400 trillion on domestic products would create 2 million jobs and nurture an economic growth of 1.72 percent.

According to Luhut, having the MSME products sold on the government's procurement e-catalogue would help prevent corruption. "We hope 90 percent [of the Bangga Buatan Indonesia products] can enter the e-catalogue next year. This would generate jobs for our MSMEs, slash poverty and stunting rate with empowerment here and there," Luhut said on Wednesday.

Having all government officials buy local products would be the same as securing a $100 billion investment, Luhut said.

"We are doing everything to look for a $5 billion to $10 billion investment, but here we have [an investment] right in our pockets. Encouraging everyone [to purchase local products] would bring great impact," the minister added.

The campaign helps expand MSMEs' market access, while also optimizing the government's spending on domestic products. MSMEs also receive three-month training.

The government has also launched Bangga Berwisata di Indonesia ('Proud to Travel Indonesia'), a tourism campaign that is expected to create a multiplier effect.The program aims to attract 1.4 billion domestic tourist visits or twice the amount the country achieved this year.

"Hopefully, it will generate Rp 3,281 trillion in tourism revenue or about 18 percent of the nominal GDP," Luhut said.

Source: https://jakartaglobe.id/business/govt-spends-rp-6518-trillion-on-local-product