Manufacturing Investment Surpasses IDR565 Trillion in the Last Decade
- VIVA/M Ali Wafa
Jakarta – Indonesia remains a primary destination for global-scale investors seeking to expand their businesses in the industrial sector.
The increase in investment realization is also supported by various strategic government policies aimed at facilitating permits and providing incentive facilities.
"During the period from 2014 to 2023, investment realization in the non-oil and gas manufacturing sector tended to fluctuate with an increasing trend. This means that investors still see Indonesia as a highly attractive and profitable location for their businesses," said Minister of Industry Agus Gumiwang Kartasasmita in a statement.
Minister Kartasasmita stated that over the past decade, there has been a sharp increase in the value of investment in the non-oil and gas processing industry, from IDR186.79 trillion in 2014 to IDR565.25 trillion in 2023.
Menteri Perindustrian, Agus Gumiwang Kartasasmita
- Kemenperin
"Cumulatively, investment realization in the non-oil and gas processing industry over 10 years (2014-2023) amounted to Rp3,031.85 trillion," he said.
The Minister added that amidst the past COVID-19 pandemic, investors still had high confidence in investing in Indonesia.
It recorded that from 2019 to 2023, the value of investment in the manufacturing sector also experienced significant increases.
"Investment in the industrial sector in 2019 amounted to Rp213.44 trillion, rising to IDR259.28 trillion in 2020, further increasing to IDR307.58 trillion in 2022, and soaring to IDR457.60 trillion in 2022," the Minister explained.
In terms of growth, the most significant increases were from 2021 to 2023, reaching 48.77 percent, followed by 2015 to 2016, which grew by 39.18 percent, and 2014 to 2015 by 24.22 percent.
According to the Minister, the increase in investment in the manufacturing sector correlates with the government's policy to promote downstreaming of natural resources, especially in the mining sector.
"The government is very consistent that investment realization isn't only driven by the service sector but also by the prospects of developing its downstream industries to deepen our manufacturing structure to be more competitive,"
Minister Kartasasmita emphasized that the government is committed to continuously promoting industrial downstreaming, which will significantly contribute to the country's revenue through export taxes, royalties, non-tax state revenue (PNBP), and dividends.
"As President Jokowi often emphasizes, industrial downstreaming is the number one priority. For example, when still exported in raw form, the contribution of nickel commodities is around IDR15 trillion per year. After entering industrialization, its value sharply jumps to US$20.9 billion or around IDR360 trillion," the Minister explained.
The Minister added that the increase in investment realization in the industrial sector has a broad impact on the national economy, including the addition of jobs.
During the period from 2014 to 2023, the achievement of the number of workers in the non-oil and gas processing industry tended to increase from year to year.
In 2014, the number of workers in the manufacturing sector was 15.62 million people, rising to 19.29 million people in August 2023.
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