Indonesia pushes consumption of local products

Indonesia’s coordinating minister for maritime and investment affairs, Luhut Binsar Panjaitan, told reporters on October 14 the value of local goods and services consumed from mid 2021 to July was IDR 487 trillion (US$31 billion), which exceeded the target of IDR 400 trillion. He was confident that by the end of the year, the amount of goods and services will reach 1.5 million products, up from the current 1.3 million products and which exceeded the 1 million products set by president Joko Widodo.

Luhut said he hoped more goods and services would come from micro, small and medium enterprises and cooperatives. This whole of government’s effort, from ministries, institutions, regional governments, to state-owned enterprises, of exceeding the target set by the president showed the commitment of the government to help local companies. However, he also cautioned local companies must ensure the quality of their offerings so that they are ready to compete on the world stage.

Luhut takes a look at local products. (photo credit: Ardenis Edbert R. from Public Information of Coordinating Ministry for Maritime and Investments Affairs)

The government’s promotion of the use of credit cards issued by state-owned banks with credit limit of IDR 50 million compared to the general IDR 10 million credit limit of private banks, the increasing use of e-commerce, laptops and handphones, all helped in the push for buying local products.

Luhut added a draft Law on the Procurement of Public Goods and Services is currently awaiting ratification and if passed, will provide a legal basis to mandate the purchase of local goods and services by the government, including a quota of minimum value and in future, possibly extending to all government’s purchases, as far as reasonably practicable and feasible. He hoped the push to buy local, away from imported goods, will drive economic growth by 1.5 to 1.7 percent and add an additional two million jobs to the economy. 

Local products. Photo credit: Angiola Harry

The minister of industry, Agus Gumiwang Kartasasmita, told reporters October 13 that micro, small and medium local companies are more affected by the pandemic and they needed more help from the government. His ministry is helping these companies to learn more about marketing activities, how to boost sales, the importance to upgrade employees’ skills, and the crucial role product development and quality plays in competitiveness.

Agus said the creative and motorcycle repair sectors have the potential to do well. His ministry, through the Bali Creative Industry Center, has provided educational and development facilities to help fashion and crafts companies to grow. Director General of Small, Medium and Multifarious Industries, Reni Yanita, said based on data from the Indonesian Motorcycle Industry Association (AISI), domestic motorcycle sales are expected to reach 5.1 to 5.4 million units in 2023, and this will translate into the need for more repair and maintenance.

Photo credit: iStock/ Bicho_raro

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