World Economy

Indonesia Seeks Upgrade for Five Industries

Indonesia is targeting the third position  in the global footwear industry.
Indonesia is targeting the third position  in the global footwear industry.

Indonesia has drawn up a road map for upgrading five manufacturing sectors and making the country one of the world’s 10 biggest economies.

The plan, titled “Making Indonesia 4.0” and released by the ministry of industry on Wednesday, calls for developing the food and beverage, textile and garment, automotive, chemical and electronics industries. This is to be achieved through efficiency enhancements, improved transportation and the use of advanced technology like artificial intelligence, robotics and the Internet of Things, Nikkei reported.

“A successful implementation of ‘Making Indonesia 4.0’ can drive real GDP growth by 1-2% per year, so that GDP growth per year will rise to 6-7% in the period of 2018-2030,” President Joko Widodo said at a launch event in Jakarta. He said Indonesia wants to crack the global economic top 10 by 2030. The country ranked 16th in 2016, according to the World Bank.

The ministry of industry expects the road map—which borrows its name from Germany’s Industry 4.0 whereby machines are connected to the internet for efficient manufacturing—will lead to the manufacturing sector contributing 21% to 26% of gross domestic product by 2030, from the current 17.9%.

The development of the five sectors is also aimed at making Indonesian products more competitive and boosting exports enough for them to contribute 10% of GDP by 2030. This, the government hopes, will create new jobs for seven million to 19 million people.

The road map also lays out plans for attracting foreign investment, improving the quality of human resources and building an “innovative ecosystem” through incentives for technology investment.

Meanwhile, Indonesia is also targeting the third position in the global footwear industry by improving its current position as the fourth country after China, India, and Vietnam.

“This year, we are targeting to enter the big three, supported by government interventions and ease of doing business,” the industry ministry’s small and medium industries for fashion and crafts director, E. Ratna Utarianingrum, stated during a Makers Talk held at the Prasetya Mulya University, South Tangerang, on Tuesday.

She said 86% of the footwear in the world is produced by Asian countries, where China takes 80% of the total production, while the other 6% is produced by India, Vietnam and Indonesia. “Our market share is 3.3% globally,” she remarked.

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