Minister Airlangga Continues to Encourage Production for Import Substitution

By : Ridwan And Aldi Firhand. A | Thursday, May 17 2018 - 21:51 IWST

Minister of Industry Airlangga Hartarto along with President Joko Widodo when releasing exports of manufactured products to the US at Tanjung Priok Port, Jakarta

INDUSTRY.co.id - Jakarta, Minister of Industry Airlangga Hartarto said to reduce the need for capital goods and raw materials or helper not generated in domestic must be driven by the production of import substitution goods.

"If you talk about the textile industry, the cotton is imported, the substitution is rayon, and it is being built," said Airlangga in Jakarta, Thursday (17/5/2018).

The statement of Airlangga responded to imports of capital goods and raw materials or auxiliary which increased in April 2018 according to the Central Bureau of Statistics (BPS).

On the one hand, he also considered that the import of capital goods and raw materials or long-term beneficiaries is positive because it shows the realization of investment.

"If the realization of the investment is positive, of course, our future hopes will spur exports, one of which is how we spur exports and what facilities are given to spur exports," Airlangga said.

With regard to exports, Airlangga explains the policy by the government to encourage exports through incentives for additional investment and education so that the workforce is better prepared.

He also said that the government is currently discussing to provide incentives for upstream and pioneer industries.

"It is being discussed, deepening the industry and encouraging exports. Yesterday, the President to Tanjung Priok to see direct exports from Jakarta to Los Angeles will certainly be pushed again from Jakarta to Rotterdam," he said.

Previously, BPS recorded the import value of raw materials in April 2018 amounted to 11.96 billion US dollars, or grew 33 percent compared to the import value in April 2017 (yoy).

While the value of imports of capital goods in April 2018 reached 2.62 billion US dollars or grew 40.81 percent (yoy).

Related to the structure of imports according to the use of goods, the role of raw materials 74.32 percent of total imports April 2018, while capital goods 16.29 percent and consumption 9.39 percent.

When compared to the same period of the previous year, during January to April 2018 the value of imports of consumer goods, raw materials and capital goods increased by 1.12 billion US dollars (26.09 percent), 8.03 billion US dollars (21 , 86 percent), and 2.32 billion US dollars (31.04 percent).