Jakarta, 14 February 2022 – “Solid and sustainable economic growth is a prerequisite for Indonesia’s transformation into an advanced economy, demanding the support of a healthy current account structure and strong manufacturing industry.” That was the key takeaway delivered by Bank Indonesia Deputy Governor, Dody Budi Waluyo, at the Recover Stronger: Shifting Toward Higher Value-Added Industries session held today (14/02) as a side event seminar of the second Finance and Central Bank Deputies Meeting (FCBD) and first Finance Ministers and Central Bank Governors Meeting (FMCBG) of Indonesia’s G20 Presidency, held from 14-19th February 2022.
Dody Budi Waluyo took the opportunity to explain how downstreaming was part of the ongoing efforts to develop the manufacturing industry by creating a solid and value-added industry structure. This will stimulate value-added exports and foster integration with the global value chain, while reducing import dependence. Furthermore, downstreaming can strengthen domestic linkages with supporting industries in other regions to encourage more inclusive development. Meanwhile, the Head of the Economic and Monetary Policy Department, Solikin M. Juhro, stated that “Bank Indonesia strives to maintain rupiah stability and support sustainable economic growth through a policy mix strategy in synergy with the Government’s structural reforms.”
Despite the downstreaming potential, several challenges have emerged, including the need to expand the economic impact of downstreaming and challenges relating to the factors of production, as well as appropriate regulations for implementing green industries. Regarding the challenges, an expert from the Ministry of Industry on Strengthening Domestic Industry Capabilities, Ignatius Warsito, provided an overview of the challenges faced in terms of green finance, implementing low-carbon technology as well as the technical assistance and training required. Meanwhile, a Senior Economist from the Asian Development Bank, Henry Ma, reiterated the importance of increasing the complexity of export products, government support for the investment climate as well as private sector involvement and discussing the incentives necessary.
Today’s seminar, presenting speakers from Bank Indonesia, the Ministry of Industry, Asian Development Bank and PT. Indonesia Morowali Industrial Park (IMIP), aimed to increase awareness concerning the importance of downstreaming mineral resources, discuss the potentials and challenges that emerge as well as formulate policy recommendations. Bank Indonesia is firmly committed to supporting government programs that develop and downstream Indonesia’s manufacturing industry, including today’s seminar on the theme of manufacturing.