The Ministry of Industry (Kemenperin) focuses on increasing the value added (Manufacturing Value Added / MVA) in Indonesia as the largest economy in Southeast Asia so that it continues to be the largest production base in the region. With MVA reaching US$ 281 billion, Indonesia is superior to other ASEAN countries (association of countries in Southeast Asia), and Indonesia has been able to shift its economy to a manufactured based one. "Various steps have been taken by the Ministry of Industry to increase added value in the industrial sector, including encouraging downstreaming, import substitution, and making the industry in the country part of the global supply chain," said Ministry of Industry Spokesman Febri Hendri Antoni Arif in Jakarta, Sunday. He said that increasing industrial value added could create a multiplier effect, including employment, export foreign exchange, and increasing contributions to taxes and excise. Moreover, he continued, Indonesia is known to have a comparative advantage in the form of natural resources (SDA), as well as the potential for skilled productive human resources (HR), so as to increase the competitiveness of domestic production. "Indonesia's economic strength lies in its large domestic market, while remaining export-oriented. This is what distinguishes it from other countries in ASEAN, such as Singapore or Vietnam," said Febri.
With a larger economy of scale, as well as more diverse types of industries, Indonesia's MVA is superior to other ASEAN countries, such as Thailand (1.23 billion dollars), Malaysia (81.19 million dollars), or Vietnam (41.7 million dollars). ). "Moreover, among ASEAN countries, Indonesia is the only one that is included in the G20. This indicates that Indonesia has become one of the largest economies in the world," said Febri. In 2022, Indonesia will be the President of the G20 and the host of the G20 Summit. In the G20 presidency in 2022, the priority issue in the industry sector is the acceleration of industry 4.0 for inclusive and sustainable industrialization. "This is also to support the global economic recovery due to the pandemic," said the spokesman for the Ministry of Industry. Furthermore, he said that comparative advantage made Indonesian manufactures stand out, such as in the wood processing and furniture industries. Exports of furniture products (HS 9401-9403) in 2020 increased 7.6 percent to 1.91 billion dollars compared to 2019's 1.77 billion dollars.
This makes Indonesia into the ranks of exporters of large furniture products such as China, Germany, Poland, Italy, and Vietnam. The largest export destinations for Indonesian furniture in 2020 are the United States, Japan, the Netherlands, Belgium, and Germany. In addition, in the automotive sector, Indonesia has a target as an export hub for motorized vehicles, both for fuel-based vehicles and electric vehicles. "Currently, there is a roadmap for the development of electric vehicles which includes plans for the development of the main EV component industry in the form of batteries, electric motors and inverters," said Febri. Furthermore, the Ministry of Industry also focuses on empowering small and medium-sized industries (IKM) to be more productive, competitive, and become part of global supply chains. "This aims to increase the value of national exports and support the import substitution program," said Febri. According to data from the Central Statistics Agency (BPS), the number of IKM reached 4.41 million business units, which absorbed 15.64 million workers. SMEs were able to contribute to the growth of the non-oil and gas industry by 21.22 percent, with the most dominant sectors being food and beverage, fashion, and handicrafts.
Several programs run by the Ministry of Industry for IKM include the development of supply chain ecosystems such as link and match as well as partnerships with large industries and SOEs. In addition, building a digital ecosystem by encouraging SMIs to enter the marketplaces platform, as well as TKDN certification facilities so that SMIs can be involved in the procurement of government goods/services and SOEs.
