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INDONESIA'S MANUFACTURING INDUSTRY STRUGGLES OVER CAPITAL SHORTAGE

2020-05-22 14:23:44

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INDONESIA'S MANUFACTURING INDUSTRY STRUGGLES OVER CAPITAL SHORTAGE

Indonesia's manufacturing industry struggles over capital shortage hinh anh 1

Illustrative photo (Source: jakartaglobe)

 

Indonesia’s manufacturing industry is facing two main obstacles in terms of limited cash and working capital flows amidst the COVID-19 pandemic in the country, said Industry Minister Agus Gumiwang Kartasasmita on May 20.

 

Jakarta (VNA) – Indonesia’s manufacturing industry is facing two main obstacles in terms of limited cash and working capital flows amidst the COVID-19 pandemic in the country, said Industry Minister Agus Gumiwang Kartasasmita on May 20.


According to the minister, one of the solutions to the limitations of capital flows is to facilitate credit restructuring. Meanwhile, working capital is needed to restart industrial activities, when the situation returns to normal. As such, he said there should be efforts to encourage investment, in addition to promoting export markets.



The minister added that to solve these challenges, the Ministry of Industry alone cannot promote the recovery of manufacturing industry, but needs coordination with other ministries and industries so that the industrial sector can recover quickly after the COVID-19 pandemic is over.



The Indonesian government is preparing a number of economic stimulus packages, including tax incentives, thus the industry must continue to operate in the context of social distancing.



According to the Central Statistics Agency (BPS), manufacturing is the largest contributor to Indonesia's Gross Domestic Product (GDP), accounting for 19.98 percent of the GDP in the first quarter of 2020. However, the industry grew only 2.06 percent during the period, lower than its 3.85-percent growth recorded in the same quarter last year./.