How Indonesia can benefit more from rising commodity prices
ILLUSTRATION. COAL PRODUCTION 2018
Reporter: Ghina Ghaliya Quddus | Editor: Yudho Winarto
KONTAN.CO.ID – JAKARTA. Commodity prices in 2017 helped Indonesia’s economic growth, namely the increase in the prices of crude palm oil (CPO), coal and petroleum so that exports could grow high and encourage overall economic growth.
According to Dendi, so that Indonesia can optimally benefit from the increase in commodity prices, the processing industry needs to be encouraged so that it can process commodities into products that have higher added value.
“For example, industries that process CPO, rubber, and also those that process mining goods such as nickel, copper and tin,” said Dendi to Kontan.co.id, Wednesday (17/1).
Building a raw material processing industry will guarantee in the long term. The context is sustainable economic growth.
“So, building a processing industry or encouraging industries based on local raw materials produced in the country, guarantees in the long term sustainable economic growth,” he continued.
Dendi said that so far the government had forgotten to build the industrial sector because it was complacent about high commodity prices during the 2010-2014 commodity boom. Currently, what is happening is de-industrialization because the contribution of the manufacturing sector has decreased until now.
“This is very dangerous for the sustainability of the economy because without developing the industrial sector, it is difficult for the Indonesian economy to grow above 6-7% in the long term,” he said.
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