Manufacturing 'needs Rp 30.9t' in investment to create 1.5m jobs

The Jakarta Post, Jakarta

Indonesia's manufacturing industry will need at least Rp 30.9 trillion (US$3.3 billion) in new investment to absorb 1.5 million workers in the coming three years.

"According to the Central Bureau of Statistics, the manufacturing industry will need total investment of Rp 8.6 trillion in 2007, Rp 10.4 trillion in 2008 and Rp 11.8 trillion in 2009 if it is supposed to employ 500,000 new workers per annum," Minister of Industry Fahmi Idris was quoted Wednesday by Antara as saying.

He said that large scale manufacturing companies operating with fiscal facilities from the government could absorb 300,000 new workers per annum, while other companies, including small-scale enterprises, could absorb another 200.000.

Those figures are different from that issued by the Capital Investment Coordinating Board, the government agency coordinating fiscal facilities for investors. According to the agency, the number of workers employed by domestic and foreign investment companies, which received fiscal facilities reached 264,000 per annum, and that by non-facility industries and small enterprises more than 300,000.

According to the Minister of Industry, several sectors in the manufacturing industry need large investments. Producers of machinery and transportation equipment, for example, need total investments of Rp 4.3 trillion, food, beverages and tobacco Rp 1.7 trillion and fertilizer, chemicals and rubber Rp 1.2 trillion.

"If we can fulfill the investments required by those sectors, I think the industry will give significant contribution to employment," said Fahmi.

Under the National Middle-term Development Plan for 2004-2009, the industry, with an average growth rate of 8.6 percent a year, is expected to uptake between 400,000 and 500,000 workers per annum

However, Fahmi said, within the last two years the growth of the industry reached only 5 percent due to various problems, including macroeconomic matters such as the fuel price increase in October 2005, high interest rates and rampant smuggling. (05)
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