Trade Ministry Encourages Indonesia to Level Up in the World Supply Chain

Jakarta, InfoPublik—Indonesia is expected to play an important role in the global value chain. Currently, Indonesia still contributes to the chain as supplier of raw materials and a labor-intensive industry.

"We can achieve a better position, starting from product design, technology-intensive industries as well as financial and service centers," said Deputy Trade Minister of Jerry Sambuaga, Saturday (28/11).

He explained that to achieve this, a sound cross-ministerial policy framework and implementation is necessary. It is hoped that this synergy will act as a way out of the "lowest ladder of value chain" trap.

Synergy is always necessary in policy regarding the Domestic Component Level (TKDN). According to Jerry, the response from the business world regarding TKDN is also quite good.

"Last week, I met with businessmen, associations and stakeholders in a public discussion and factory visit in Batam. They were very happy with the TKDN policy. In fact, asked for expansion and intensification in the implementation. I think this is one of the ways to have more of a role in the global supply chain, "said Jerry.

Another measure to level up Indonesia’s position  in the global supply chain is trade agreements, as according to Jerry, will shorten the supply chain.

"For example, Indonesia and Australia has the IA-CEPA. The two countries certainly intend to get the best benefits by collaborating to reach a certain position in the world supply chain. Such trade agreement will become a means of mutual growth and collaboration, not eliminating each other. That's the ideal," he said.

He hopes that the trade agreement is interpreted not only as an agreement, rather, as part of the framework for developing products, technology and human resources. Cooperation and collaboration among stakeholders will serve as the key of such agreement.

Jerry also emphasized the importance of the development of the young generation and research and development (RnD). A country, he said, will not level up from the bottom of the global supply chain without good research and development.

"That is why I communicate intensively and build synergies with young people who have great potential to produce high-tech products. We are trying to support them with trade facilitation. In the future, if this is done continuously, we can become a developed country, especially in terms of goods and services produced and traded with other countries," he said. (Reporter: Wandi, Translator: Penni P. Rusman)