Entrepreneurs Say Deindustrialization Symptoms Are Becoming More Apparent, A Heavy Burden for the Next Administration
Monday, 10 June 2024
The symptoms of deindustrialization are becoming more apparent, triggered by the loosening of industrial protection policies. This situation becomes a challenge for the new administration in the era of President-elect Prabowo Subianto.
The Chairperson of the Indonesian Employers Association (Apindo), Shinta W. Kamdani, also expressed her concerns about the symptoms of deindustrialization, reflected in the shrinking proportion of the manufacturing industry's contribution to the Gross Domestic Product (GDP) over the past decade.
According to data from the Central Statistics Agency (BPS), the contribution of the non-oil and gas processing industry to GDP in 2014 was 21.28%, a drastic decline from the previous year, which contributed 23.6% or IDR 2,152.6 trillion of the total GDP of IDR 9,084 trillion in 2013. The decline continued until 2023, where the manufacturing contribution stood at 18.67% or IDR 3,900 trillion of the total GDP at current prices, reaching IDR 20,892 trillion.
The proportion of manufacturing to GDP in 2023 did increase compared to 2022, which contributed 18.34%, but it is still lower than the manufacturing share in 2021, which was 19.25%.
"All this time, business actors and economic analysts have always expressed concerns about the increasing pace of deindustrialization if the business or investment climate in the manufacturing sector is not improved," she said.
Shinta mentioned that deindustrialization could minimize job opportunities in the manufacturing sector, leading to increased structural unemployment. Moreover, this condition is evident from the decline in processing industry productivity and the still low competitiveness of manufacturing output.
As a result, local products find it difficult to compete with imported products domestically and similar products in export markets. On the other hand, industry players are targeted to boost manufacturing growth by 5-6% with a contribution to GDP reaching 19.6% by 2025.
Sumber : https://ekonomi.bisnis.com/read/20240610/257/1772675/pengusaha-sebut-gejala-deindustrialisasi-makin-nyata-beban-berat-pemerintahan-era-selanjutnya
