Sunday, 20 June 2021 | 22:56 WIB

Industrial Sector is Most Significant Contributor to National Economy

Airlangga Hartanto, Indonesia Minister of Industry (industriamagz)

JAKARTA, NNC - Indonesia Minister of Industry Airlangga Hartarto says that Indonesia, in its economic proportion, can be categorized as an industrial country. The reason, the industrial sector is the largest contributor to national economy, with contribution surpassing 20 percent. 

"The 20-percent contribution is significant in supporting Indonesia to reach the ranks of the world’s elites. In the category of value added manufacturing, Indonesia is among the top ten of the world. This ranking is parallel with Brazil and the UK, and larger than Russia, " he said when delivering a scientific oration at the Graduation of Universitas Muhammadiyah Malang 86th Period IV Year 2017 in Malang, Saturday.

Based on the percentage, according to him, Indonesia is included in the top five countries of the world whose industrial contribution is important. The UK contributes about 10 percent, while Japan and Mexico are under Indonesia with a contribution of 19 percent. "In fact, we are also above the United States," Airlangga added.

Airlangga said that the world now thinks that manufacturing is a vital sector for the economy. This has been agreed in the World Economic Forum, which states that industry is a process that involves pre-process and post-process as a whole. In the simplest language, industrial processes are what happens inside and outside the factory.

"Both are inseparable. So with this new paradigm, the contribution of Indonesian industry can reach more than 30 percent. Of course this increasingly affirms the importance of the industry for the national economy, "he said.

Furthermore, Airlangga said the industry's performance was again above the economic growth in the third quarter of 2017. This is a good momentum that must be maintained and even needs to be improved again, as the government is trying to create conducive investment climate and ease of business. This step needs to be implemented in synergy among stakeholders.

Data from Statistics Indonesia (BPS) points that growth of non-oil and gas industry touched 5.49 percent, or higher than economic growth of 5.06 percent in the third quarter of 2017. The industrial branches with strong growth are base metal industry of 10.6 percent, followed by food and beverage industry of 9.49 percent, machinery and equipment of 6.35 percent, and transportation of 5.63 percent.

The Minister added that in the next five to 10 years, the potential of the industry is also relied upon by other countries. For that, the key to success in industrialization lies on three three main factors, namely human capitals, capital or investment, and technology.

"Improving the competence of human capitals through vocational education is the current government priority program after infrastructure development. The preparation of skilled human capitals aims to establish and produce a workforce that meets the needs of industry or demand driven, "Airlangga said.