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Despite slower growth in some business sub-sectors, Indonesia
is not suffering from "de-industrialization", with manufacturing
continuing to play a significant and stable role in the economy, a
seminar heard Wednesday.
Head of the Research and Development Agency at the Industry Ministry,
Dedi Mulyadi, said de-industrialization was not occurring in Indonesia,
as some economists have suggested, pointing to the fairly stable
contribution of manufacturing to gross domestic product over the past
three years.
De-industrialization is broadly defined as a decline in the
manufacturing industry's real output for a relatively long period of
time.
"According to the Central Statistics Agency, the contribution of
manufacturing to Indonesia's GDP during the last three years had been
stable at above 27 percent.
"In 2005, it was 27.41 percent, in 2006, it was 27.54 percent, and in
2007, it was 27.01 percent," he said.
Dedi said the government acknowledged that several sub-sectors
experienced negative growth in 2006 and 2007, pointing to textile,
timber and wood products.
The textile industry has been hit hard by an influx of Chinese products
into domestic market, both legally and illegally, while wood-related
products have been hurt by widespread illegal logging.
Head of the Indonesian Textile Association, Benny Soetrisno, said the
negative growth in the textile sector was a blip and that the sector's
competitiveness was still good.
He said there were several conditions that prevented
de-industrialization in the textile industry.
"The industry has an integrated structure and long experience. Besides,
Indonesia's textile industry possesses one of the world's largest
production capacities."
"Now, the already strong competitiveness is supported by the
government's seriousness to expand the industry," he said, citing a
recent government subsidy scheme for textile makers to revitalize aging
machinery.
However, Anton J. Supit, head of the Indonesian Footwear Association,
said some indicators pointed to the footwear industry standing on the
brink of de-industrialization.
"For example, we can see that since 2006, some footwear makers like PT
Dong Yoe Indonesia, PT Tong Yang, PT Spotec, PT Korionesia and PT Asia
Sport have closed down, putting 19,000 people out of work," he said.
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