Core Indonesia senior economist, Ina Primiana sees the main obstacle facing the Indonesian manufacturing industry so far is the problem of competitiveness. This condition is caused by several factors, one of which is the policy that facilitates imports.
Ina disclosed, the growth of the manufacturing industry has continued to decline in the last 10 years. In 2010, the growth was 6.4%, then in 2019 it was only 4.01%. This growth is also lower than Indonesia's economic growth rate. In addition, its contribution to gross domestic product (GDP) since 2015 has also been relatively stagnant at around 20%.
"The policy which facilitates imports causes domestic industries to be unable to compete with imported goods which are much cheaper in price, so the use of imported raw materials and auxiliary materials is more of a priority. Meanwhile, the ease of imports does not correlate with the increase in imports and investment, "said Ina Primiana in the webinar" Post-Pandemic Reindustrialization Agenda "held by Core Indonesia, Wednesday (20/1/2021).
Ina also saw that the import policy or free trade agreement (FTA) was carried out without first preparing ammunition for the national industry, so that it was immediately eroded by imported products. Then the existing policies are also less strict against illegal imports, or the misuse of the use of import facilities that has enriched the online business of shopping for imported goods.
"Next, there is no market guarantee for domestic industrial products, so they are unable to compete. So it is true that the opportunity and trust in the domestic industry is low. Sometimes domestic products are more expensive because the government doesn't intervene, ”said Ina.
Another thing that causes the competitiveness of the manufacturing industry to lose is weak research and development (R&D), so that the design of domestic industrial products is considered lagging and does not meet the needs of the downstream industry or trade. Coupled with the high cost of logistics because the implementation of logistics infrastructure has not been integrated and creates high economic costs and high energy costs for industry.
"Indonesia also does not take advantage of Non Tariff Measures (NTM) to deal with imported goods," added Ina.
So that according to Ina, the draft government regulation (RPP) which becomes the implementing regulation of the Job Creation Act will be able to encourage re-industrialization, if the existing articles regulate some of the problems faced by the manufacturing industry. That way the competitiveness of the manufacturing industry will increase, and the industrial trade balance surplus can be maintained and increased.