The economic growth target of 7-8% proposed by Prabowo Subianto for his upcoming administration faces major challenges, especially in the manufacturing sector. The General Chairperson of the Indonesian Filament Fiber & Yarn Producers Association (APSyFI), Redma Gita Wirawasta, emphasized that to achieve this target, the manufacturing industry needs to experience significant growth, which is still far from expectations.
According to Redma, in order to achieve the economic growth target of 7-8%, the growth of the manufacturing industry needs to reach 10%. However, in reality, over the past five years, Indonesia's economic growth has only reached 5%, with the manufacturing sector only able to grow 4-4.5%. The textile sector itself is facing worse conditions, with its growth plummeting to minus 16%. This condition, according to Redma, presents a major challenge for the sector's contribution to achieving the economic growth target.
One of the main issues faced by the manufacturing sector, especially textiles, is the import policy that is increasingly flooding the domestic market. Redma said that the revision of the regulation of Permendag No. 36/2024 to Permendag No. 8/2024, which was initiated by the Ministry of Finance and the Coordinating Ministry for Economic Affairs, actually triggered a surge in textile imports. This has a negative impact on the domestic market which is the focus of the Ministry of Trade to maintain.
In addition to import policies, Redma also highlighted the role of the Ministry of Finance, especially the Directorate General of Customs and Excise and the Directorate General of Taxes, in supporting the growth of the manufacturing sector. Customs, according to him, should be more proactive in regulating the domestic market so that manufacturing can develop, while tax policies also need to be fairer, especially regarding the handling of illegal players in the retail sector. He said that taxes tend to target formal actors, while illegal players involved in smuggling goods often escape supervision.
Redma also highlighted the importance of an accurate commodity balance in order to control the rate of imports. According to him, the textile problem is very complex, with more than 1,100 Harmonized System (HS) codes that must be managed. For this reason, an import quota policy is needed that is based on valid and accountable data.
Overall, the textile and manufacturing sectors in Indonesia face major challenges in supporting ambitious economic growth targets. Strong coordination and commitment from various ministries and related agencies are needed so that the policies implemented can encourage the growth of this sector, rather than hinder it.