The issuance of the Job Creation Law is a concrete manifestation of the government's commitment to creating a conducive business climate in IndonesiaJakarta (ANTARA) - Indonesia's economy is largely supported by the manufacturing industry, as evident from investment in the industrial sector, which accounted for 35.9 percent of the total national investment in January-September, 2021, the Industry Minister has said.
During the period, investment in the industrial sector reached Rp236.8 trillion (US$6.6 billion), Minister Agus Gumiwang Kartasasmita noted in a written statement received here on Saturday.
"Despite being faced with various global challenges, especially the impact of the COVID-19 pandemic, the manufacturing industry sector in Indonesia continues to play an important role, especially as the main support or driving force for the national economy," he said.
As per data from the Investment Ministry and the Investment Coordinating Board (BPKM), domestic investment in the industrial sector reached Rp63 trillion (US$4.4 billion) and foreign investment (PMA) in the industrial sector touched Rp173.8 trillion (US$2.2 billion) in the nine months since January 2021.
The data indicates that foreign investors have faith in Indonesia as the right choice to build their production base, Kartasasmita said.
At the same time, in January-September 2021, the total value of the national investment was recorded at Rp659.4 trillion (US$4.6 billion), an increase of 7.8 percent compared to the year-ago period, when it was pegged at Rp. 611.6 trillion (almost US$4.3 billion), he informed.
In the nine months since January, national investment reached 73.3 percent of the target of Rp 900 trillion (US$63.2 billion) for 2021, the minister said.
According to Kartasasmita, the industry players' choice to invest in the country was backed up by several strategic programs and policies issued by the government, such as Law Number 11 of 2020 concerning Job Creation.
“The issuance of the Job Creation Law is a concrete manifestation of the government's commitment to creating a conducive business climate in Indonesia. In its implementation, the Job Creation Law has provided many conveniences for investors in the industrial sector, whether in obtaining business licenses or receiving fiscal and non-fiscal incentive facilities," he said.
He also highlighted that investments in the industrial sector have had a significant positive impact on the national economy in terms of foreign exchange earnings and employment.
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"In addition, through increased investment, we are optimistic that the national industry can be competitive on a global scale, given there is an expedition of the domestic manufacturing structure," he remarked.
Furthermore, investment has also boosted the growth of import substitution industries, Kartasasmita said. This is in keeping with the ministry's goal of reducing imports by 35 percent by 2022, he added.
"We continue to work hard in building a manufacturing industry sector that is sovereign, independent, competitive, and inclusive," the minister said.
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He pointed out that the basic metal, metal goods, non-machinery and equipment industries were the biggest contributors to foreign direct investment in the third quarter of 2021, accounting for US$1.5 billion or 20.9 percent of the total investment.
The total realization of investment (foreign direct investment and domestic investment) in the sector reached Rp25.1 trillion (US$1.7 billion), he informed.
“This investment is in line with the government's steps to accelerate downstream policies in the industrial sector. The goal is to increase the added value of domestic raw materials so that they can push the national economy. In accordance with the direction of President Joko Widodo, we no longer want to export raw materials, but export finished goods that have high economic added value," Kartasasmita remarked.
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Translator: Risbiani F, Mecca Yumna
Editor: Fardah Assegaf
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