"As Industry Minister, I must be prepared to cooperate with the association for the worst possibility if the COVID-19 cannot be overcome," he said in Balaraja, Banten Province, on Wednesday.
Agus said China is Indonesia's most important trading partner where 25 percent to 30 percent of its trade balance is obtained from trading with the country.
"Of course, we must be prepared. We have to anticipate.If the recovery of this corona does not meet our expectations, this will certainly disrupt the availability of raw materials," Agus said.
The minister said that several industries were hampered by the impact of the coronavirus outbreak.
Among them are the textile industry and textile products. These industries whose the supplies of raw materials partly rely on China are starting to stop their operations.
"As a result, the national industry must look for sources of raw materials from other countries. Of course, this will affect the price and will affect the competitiveness of the industry itself, " he stated.
Thus, not only Indonesia, other countries whose supplies of raw materials are from China will also compete to find alternative sources and markets from other countries.
This is being anticipated by the Indonesian Government so that the competitiveness of the country's domestic industry is well maintained.
An economist earlier forecast that the coronovirus outbreak would potentially lower Chinese economic growth by one percent, thereby resulting in a 0.09 percent contraction in the Indonesian economy this year.
Every one percent drop in the Chinese economic growth will reduce the Indonesian economic growth by a minimum of 0.09 percent and a maximum of 0.1 percent to 0.15 percent, Fithra Faisal Hastadi of the University of Indonesia (UI) recently stated.
The Chinese economic growth would potentially fall by over one percent. However, the forecast would only be 20 percent correct, so it would most likely drop by one percent.
He noted that the potential drop of 0.09 percent in the Indonesian economic growth owing to the coronavirus outbreak was relatively small compared to that of other countries.
"It is large. However, if we compare it with that of Vietnam, Thailand, and Singapore, it will be smaller since their transactions with China are larger than those between Indonesia and China," he stated.
This would likely occur since the Indonesian economy was more dependent on the domestic factor. Hence, in the event of any external upheaval, it would have no significant impact on the Indonesian economy.
"For the time being, the external factor has an impact on the Indonesian economy, but it is not as significant as the domestic one," he stated.
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Translator: Sella P, Azis Kurmala
Editor: Rahmad Nasution
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