Moving Forward
Category: Issues & Ideas By : Taufik Darusman Read : 346 Date : Friday, August 12, 2016 - 07:22:44


Ahmad Zamroni / Forbes Indonesia

Minister of Industry Saleh Husin is a political appointee to the Cabinet—the 53-year-old economist comes from the National Conscience Party (Hanura Party)—and he is no stranger to the world of manufacturing. “I actually wanted to join the military academy but did not make it and entered business. Probably all the better by the way things turned out,” he told Forbes Indonesia.

Saleh spent most of his youth in Rote, East Nusa Tenggara, where he was born, selling cakes and fish in the market while completing his education. He later went to Jakarta to enter the Bekasi-based University of Krisnadwipayana and also started several businesses, one of them being a timber factory in Padang. In the early 2000s Saleh entered politics and sat on the Hanura Party’s central board. He was a House member (2009-2014) and was re-elected for a second term, but chose to join the Cabinet when President Joko Widodo appointed him minister of industry. Excerpts:

What is the current situation of the nation’s industries?

Despite heavy challenges throughout 2015, our non-oil and gas industries grew by 5.0%, higher than last year’s national growth figure of 4.8%. Exports of industrial products in 2015 reached $107 billion, or 71% of national exports of $150 billion. In our 2015-2019 industrial development program, the growth of non-oil and gas industries was set at 8.4% by 2019, which will raise the contribution of non-oil and gas manufacturing to GDP to 19.4% by 2019, and provide work to 17.8 million in the same year.

The Ministry of Industry has also set priority industries, namely cosmetics, food, pharmaceuticals, medical equipment, textiles, tannery products, footwear, transportation, electronics and telematics, power generating equipment, capital goods, components, auxillaries and industrial services, basic metals and non-metal extractive materials, oil and gas-based basic chemicals, and coal.

What are the growth projections for the years ahead?

This year the investment target in the industrial sector is Rp 305 trillion, or 51.3% of the Rp 595 trillion set by the Investment Coordinating Board. In the first quarter, domestic investment in the sector reached Rp 50 trillion, comprising 580 projects, up 18.6% over the same period last year, which was Rp 42.5 trillion with 409 projects. Meanwhile, foreign investment in the same period reached $5.5 billlion, a growth of 91% over $2.8 billion in the same period last year.

The economy grew an annual average of 8% in the 1990s thanks to manufacturing. Can that happen again?

We hope to see a reprise of the golden years, when manufacturing contributed 30% of the national economic growth figure. That can happen by way of fiscal incentives such as a tax holidays and tax allowance, and non-fiscal incentives such as attractive financing schemes. We are optimistic the manufacturing sector will contribute around 19.5% of GDP this year.



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