VIVAnews - Industrial growth is expected not to exceed 8 percent. Overly high manufacture industrial growth could disrupt the economic stability.
Industry Ministry Agricultural and Chemical Industry Director General Benny Wahyudi said economic instability caused by exorbitant industrial growth would also lead to large increase in basic material and equipment imports.
“The government sets industrial growth to be 6 to 7 percent per year,” Wahyudi said while opening the Indonesian Food and Beverage Producers Association (GAPMMI) meeting in Jakarta on Thursday, March 11.
He also said the limit for industrial growth is about 8 percent. Anything goes beyond it will be resulted in overheated economy, in which Indonesia’s reserved foreign exchange will be negative.
According to Wahyudi, the limit is different from in other countries.
One of the examples is China that has been able to grow up to 10 percent because the industry is dominated by upstream sectors, which has caused the number of Chinese reserved foreign exchange to rise sharply.
“As for us, our upstream industries are not strong enough, so are basic material suppliers in the processing sector, which requires Indonesia to import basic or supporting material and processing machines in big amount,” Wahyudi said.
Therefore, he said the ministry was currently focusing on upstream industry intensification in order to support the high growth of certain processing industries.
“Food and beverages industry has been experiencing high growth but it wasn’t supported by domestic basic materials and equipments. That’s why it has to be slowed down,” he said.
“The industry intensification program hasn’t been running properly and taxes for imported machines are still zero percent, which makes it difficult”.
Meanwhile, GAPMMI Chairperson Thomas Darmawan said uncontrolled industrial growth would be a challenge for basic materials and human resources procurement.
He assumes national food and beverages industry are still depending on imported basic materials such as wheat, milk and sugar.
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Translated by: Nataya Ermanti
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