Acceleration of National Economic Recovery, Government Optimizes Domestic Goods Usage ntensi cation DN rogram

The government is determined to optimize the program for Domestic Goods

sage ntensi cation D This strategic move is considered the appropriate one to stimulate the productivity of the industry players in the middle of the lo impact of the pandemic "ovid#$%

By reviving business enthusiasm in the industrial sector, it will accelerate efforts to recover the national economy. So far, the industrial sector has consistently provided the largest contribution to the national Gross Domestic Product (GDP).

In the first quarter of 2021, the non-oil and gas processing industry sector is still the economy's primary driver, contributing 17.91% to the national GDP, higher than the same period in 2020, recorded at 17.86%.

Therefore, the Ministry of Industry commits to creating a conducive business climate, especially for national industry players. Hence, appropriate policies and strategic steps are needed to grow significantly in Indonesia's manufacturing sector.

"We want to create a condition where domestic industries feel comfortable in their own homes. One that needs to be carried out today is optimizing the use of local content and Domestic Goods Usage Intensification (P3DN)," said Minister of Industry Agus Gumiwang Kartasasmita.

The Minister of Industry explained that the P3DN program regulates government agencies' obligations to optimize domestic production, especially related to goods/services procurement activities financed by the APBN/APBD. In addition, it gives preference to goods/services from domestic production in these projects.

"We know that the state budget spending in ministries and institutions is quite large. It can be a tool so that domestic industries from various sectors can also develop.

Indeed, what needs to be emphasized is that we must have the same view, that our interest is to encourage the growth of the national industry," he added.

Agus gave an example, the procurement of goods in SOEs (BUMN) such as Pertamina and PLN have enormous potential to optimize the use of local products. "We hope that SOEs, which are part of the government, have the same view to advance the domestic industry," he said.

According to Agus, the government has provided flexibility for off-takers (buyers) to use domestic production, even though the price level is above 25 percent of imported products. "So, there is no need to worry about ministries, institutions, and state-owned enterprises. Because the regulations are already possible," he explained.

Agus also emphasized that buyers need to be aware that domestic industrial products are now able to compete with imported products. Furthermore, the Indonesian must have a sense of pride in the use of local products. "Our industry is ready to compete," he said.

The implementation of the P3DN program is considered to provide space for national industries to increase production capacity and the quality of goods and services produced to compete independently in the international market. Meanwhile, in terms of reducing the dependence of the domestic market on imported products, P3DN also be additional protection against the potential exchange rate depreciation.

The Ministry of Industry noted that the oil and gas supporting industry has Local Content (TKDN) achievements ranging from 25.25%-75.09%, then the electricity industry has TKDN achievements of 7%-80%. Meanwhile, TKDN achievements in the agricultural machine tool industry sector ranged from 25%-62%, and in the medical equipment industry sector with TKDN achievements of around 6.26%-98.52%.

"At least in the next five years, the ideal of local content is above 40 percent for all sectors. Especially those that use government budgets," he said.

Moreover, to strengthen the domestic industry structure and reduce dependence on imported products, the average Domestic Content Level (TKDN) is targeted to reach 43.3% in 2020 and increase to 50% in 2024, as stated in the Plan document. National Medium Term Development (RPJMN) 2020-2024.

Currently, the capabilities of several domestic manufacturing industry sectors such as the oil and gas supporting industry have achieved TKDN ranging from 25.25% to 75.09%. In comparison, TKDN achievements in the electricity industry sector have gone from 7.0% to 80.0%.

The achievement of TKDN in the agricultural machinery industry sector ranges from 25.0%-62.0%, and in the medical equipment industry sector, it is around 6.26%-98.52%. "The higher the TKDN achievement, the more domestic components will be used; therefore, it is necessary to target an increase in the TKDN achievement in each industrial sector," he said.(*)