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Economy Indonesia News Technology

Indonesia’s Manufacturing Sector Keeps Declining

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The World Bank praises Indonesia over recent legal changes encouraging investment in the country. At the same time, it says Jakarta has not done enough to reform trade policies that are hurting the manufacturing sector.

World Bank chief economist for the East Asia and Pacific region, Aaditya Mattoo, says Indonesia needs to implement deeper reforms to facilitate imports and exports.

“Indonesia has been marginalized by global value chains,” Mattoo says.

According to the data from Statistics Indonesia (BPS), the manufacturing sector’s share of the country’s gross domestic product (GDP) has been declining over the years. In 2010, the sector was responsible for 24.80% of Indonesia’s GDP, but that figure shrank to 20.84% in 2015, dropping further to 18.34% in 2022.

Mattoo notes that current policies have failed to make it easier “to import in order to export”, referring to companies that import parts or materials to create products for export.

Read the full article HERE.

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