The Government Prepares Strategic Steps to Encourage Economic Growth in 2020-2024


JAKARTA, – The government prepares economic strategic steps 2020-2024 designed to encourage national economic growth through the manufacturing sector. There are three main policy directions that have been prepared, including increasing productivity through increasing labor skills, increasing manufacturing export competitiveness, and strengthening the upstream industry strategy.

“This program is to maintain the sustainability of economic development with a baseline of 5.4 percent growth. We also talked about the policy. With this strategic step, today’s achievements must be continued with the next target,” said
Airlangga Hartarto, Minister of Industry in Jakarta, Sunday (2/17).

The government also sets out six strategic policies to encourage national economic growth 2020-2024. First, strengthen the openness of the trade investment climate and involvement in global production. Second, strengthen the ability to encourage innovation and accelerate technology adoption.

Third, increasing economic diplomacy and the use of free trade agreements. Fourth, optimizing the potential sources of economic growth. Then, strengthen the supporting pillars of the manufacturing sector’s growth. Finally, creating a macroeconomic policy that is conducive to supporting manufacturing development.

The implementation of Making Indonesia 4.0 initiative is also believed to be able to boost three aspects, namely Gross Domestic Product (GDP) in general, contributions from manufacturers and employment opportunities. The projected target is GDP growth of up to 1-2 percent of the baseline, opening up more than 10 million additional jobs and more than 25 percent of the contribution of the manufacturing sector GDP.

One of the government’s priorities in Making Indonesia 4.0 is to improve the quality of human resources (HR). Efforts are made through the development of vocational education in the industrial sector so that HR competencies increase and are highly competitive.

In this regard, the government provides tax incentives of up to 200 percent through super deductible taxes to industries involved in vocational education programs, as well as incentives of up to 300 percent in industries that carry out research and development (RnD) activities to produce innovation.

“The form of facilities is in the form of reducing taxable income by 200 percent from the costs incurred for vocational activities or link and match with Vocational High Schools (Vocational Schools) or polytechnics,” he said.

With the link and match program, the government encourages the industry to play an active role in involving Vocational Schools. For example, industries can provide factory production machinery assistance to SMKs that have collaborated, to support the running of a dual system curriculum that includes 30 percent theory and 70 percent practice.

Airlangga said the company’s super deductible tax facility could be obtained by cooperating with Vocational Schools in the link and match program initiated by the Ministry of Industry.

There are 36 competencies in vocational expertise in accordance with the needs of industries that get super deductible tax incentives. The proposed sectors include industrial electronics, installation of electric power utilization, machinery, welding, casting, industrial mechanical maintenance, metal instrumentation, process control, mechanical control, industrial automation, mechatronics, industrial chemistry, chemical analysis, audio video repair and maintenance, maintenance and repair of heavy equipment.

Then for the automotive sector is divided into five more specific fields, among others, maintenance and repair of automotive light vehicles, automotive motorbike maintenance and repair, electronic design and repair (automotive electronics), automotive body repairs, and manufacturing of automotive industry components.

The furniture sector is divided into two more specific fields, namely the manufacture of furniture products and furniture product designs. The shipping sector is divided into five more specific fields, namely shipbuilding, ship construction, ship welding, ship electricity, and ship machinery installation.

The textile and garment sector is divided into five more specific fields, namely, the design and production of textile crafts, textile yarn manufacturing, fabric manufacturing (weaving and knitting), garment production and textile chemistry. Finally, related to industrial logistics, including warehousing logistics, transportation logistics, and warehousing and distribution management.

Airlangga said that in order to support the improvement of HR competencies in the industrial sector, the government added education funding for vocational funds amounting to Rp1.78 trillion because HR was the key to the industry. “We continue to push for more and more SMKs to join the link and match program. There are 14,000 schools in Indonesia in total,” he explained. (TPP)