Investment in Manufacturing Industry Shows Upward Trend in Past Decade: Industry Minister

INDUSTRY.co.id - Jakarta, Indonesia affirmed its position as the main destination for global investors in industrial sectors owing to strategic policies adopted by the Government, including the provision of ease of doing business and incentive facilities.

“During the period of 2014-2023, investment realization in the non-oil and gas processing industry sector shows an upward trend. This means that investors acknowledged Indonesia as a very attractive and profitable location for their business,” Minister of Industry Agus Gumiwang Kartasasmita said, as quoted by official website of the Ministry on Thursday (02/15).

He went on to say that in the past decade investment value in non-oil and gas processing industry sector increased significantly from Rp186.79 trillion in 2014 to Rp565.25 trillion in 2023. In addition, the total investment realization value in that sector during the past decade reached Rp3,031.85 trillion.

The Minister said that investors still have high trust to invest in Indonesia during the COVID-19 pandemic which leads to a significant increase in investment in manufacturing industry during a 2019-2023 period.

“Investment in the industrial sector in 2019 amounted to Rp213.44 trillion, rose to Rp259.28 trillion in 2020, rose again by RP307.58 trillion in 2022, and jumped to Rp457.60 trillion in 2022,” he said.

According to the Minister, investment in 2021 skyrocketed by 48.77 percent in 2023. The second and third most-significant growths are investments in 2015-2016 which grew by 39.18 percent and in 2014-2015 which grew by 24.22 percent.

Agus said that the increase in investment in industrial sectors closely related with the Government’s policies to speed up downstreaming of resources, particularly mining products so that it increased competitiveness of the national manufacturing sector.

He also underscored the Government’s commitment to push for downstreaming of the industry which will contribute to state revenues through export taxes, royalty, non-tax state revenues (PNBT), and dividend.

“As President Joko “Jokowi” Widodo has mentioned before, industrial downstreaming is our top priority. For instance, nickel only contributed Rp15 trillion [to the state revenue] a year when it’s imported as raw materials. The value rose significantly to US$20.9 billion or Rp360 trillion when it became industrial commodity,” he said.

In addition, the rise of investment realization in industrial sector also brought a positive impact to the national economy and absorbed more manpower. In 2023, the number of manpower in manufacturing industry increased to 19.29 million people from 15.62 million people in 2014. Though during COVID-19 pandemic in 2020, the number of manpower showed a declining trend, it managed to recover after the pandemic and grew gradually as industry rebounds.