INDUSTRIALISASI INDONESIA

PEREKONOMIAN INDONESIA

“INDUSTRIALISASI INDONESIA”

 DISUSUN OLEH :

1.      ARUM FEBRIANA. R (21215057)

2.      MIKE NOVIANA (24215174)

3.      WIDYA ANI (27215135)

1EB21

UNIVERSITAS GUNADARMA

ATA 2015/2016

CHAPTER 1

DISCUSSION

1.1  Concept and objectives industrialization

Beginning from the concept of industrialization, industrial revolution occurred in the 18th century in England, and the discovery of new methods in cotton invention that creates the specialization of production and increased productivity of factors of production. The subsequent new discovery in the processing of iron and the steam engine that encourages new innovations in the processing of steel, steam trains and ships. and after World War II, emerging new technologies such as assembly line, electric motors, item synthesis, telecommunications, electronics, bio, computers and robots. after the forming of developments and changes in the pattern of world trade volume and the process of industrialization in the world.

Industrialization is a process of interaction between technological development, innovation, specialization and world trade to increase incomes by encouraging changes in the economic structure.

Industrialization is one of the long-term strategy to ensure economic growth. only a few countries with low population and abundant natural resources such as Kuwait and Libya wanted to achieve a high income without industrialization.

1.2  Factors Factors driving industrialization

a.       The ability of technology and innovation

b.      The rate of growth of national income per capita

c.     The conditions and the initial structure of the domestic economy. Countries that initially has an industrial base / primer / upstream such as steel, cement, chemical, and industry, such as machine tool production will experience faster industrialization process

d.     Large DN market share which is determined by the level of income and population. Indonesia with 200 million people led to the growth of economic activity

e.      Characteristics of industrialization is the way the implementation of industrialization such as the implementation phase, the type of seed industry and incentives provided.

f.   The existence of SDA. Countries with large natural resources tend to be slower in the industrialization

g.      The policy / strategy of the government such as tax holidays and duty free for export oriented

1.3  The development of the manufacturing industry sector Indonesia

Industries are classified:

a.       Primary Industry / upstream that is processing the output of the mining sector (raw materials) into a ready-made raw materials for the needs of the production process at a later stage

b.      secondary industry / manufacturing include: the manufacturing industry capital (machines), intermediate goods and the means of production, and downstream industries that produce consumer products

A.    Growth of output

High output growth caused by high external demand.

The level of development of the manufacturing industry can be seen from the deepening of industrial structure itself. The industrial structure:

1.      Variety of products - consumer goods, simple, consumer goods with content more advanced technology, capital goods,

2.      The intensity of the usage of production factors - labor-intensive goods and goods with solid capital,

3.      Market orientation of domestic goods and exports

B.     Deepening Industrial Structure.

Long-term economic development could change the economic powerhouse of agriculture to industry and shifting the structure of the industry has competitive and comparative advantage.

Changes in industrial structure caused by:

a.       The aggregate offer technologically  -  development, quality of human resources, innovation of new materials for production

b.      Aggregate Demand - increase in per capita incomes change the volume and pattern of consumption

C.     The level of technology product manufacturing.

 The technology used in the manufacturing industry include:

a. Technology in the high include: computers, medicine, electronic products, communications equipment and so on

b.  Technology being include: plastics, rubber, metal products simple, oil refining,  nonmetallic mineral products

c.     low Technologically include: paper, printing, textile, apparel, beverages, cigarettes, and furniture

D.    Exports

Export performance could be used to measure the results of development of manufacturing industry.

E.     Reliance on imports

Dependence on imports is also an indicator of the success of the construction industry sector.

1.4  Problems Industrialization

The manufacturing industry in the LDCs more backward than in DCs, this is because:

1.      Limitations of technology

2.      Quality of Human Resources

3.      Limited government funding (always deficit) and the private sector

4.      Cooperation between government, industry and educational and research institutions still  low

Problems in the national manufacturing industry:

1.      This structural weakness

·         export base is still narrow and market  - although Indonesia has many natural resources and TK, but the product and the market is still concentrated:

a.       Limited to four products (plywood, apparel, textiles and footwear)

b.      Textile & apparel market limited to a few countries: USA, Canada, Turkey and Norway

c.     USA, Japan and Singapore imports 50% of the total export of textiles & apparel from Indonesia

d.     Products contributed 80% of manufacturing exports Indonesia is still easy affected by changes in demand for products in the market are limited

e.    Many elected labor-intensive manufactured products decreased price emerging new competitors like China and Vietnam

f.       Traditional manufacturing products as a result of decreased competitiveness factor such internal demand wage increase

·         Very high import dependence

   1990, Indonesia attracted a lot of foreign investment to high-tech industries such as chemicals, electronics, automotive, etc., but still the process of merging, packing and assembling the results:

a.       The import value of raw materials, components and intermediate inputs are still higher than 45%

b.      Labor-intensive industries such as textiles, apparel and leather depend on imports of raw materials, components and intermediate inputs is still high.

c.       PMA manufacturing sector is still dependent on the supply of raw materials and components from LN

d.      The transition of technology (technical, management, marketing, development organization and external linkage) of FDI is still limited

e.       Development of products with its own brand and network development marketing is still limited

·         There is no medium technology industries

a.    Contributions medium technology industry (metals, rubber, plastics, cement) to the development of the manufacturing sector declined in 1985 -1997.

b.   Contribution of capital-intensive products (material of plastics, rubber, fertilizers, paper, iron & steel) against exports decreased 1985 – 997

c.     Production dg low technology products is growing rapidly.

·         Regional concentration

Medium and large industries are concentrated in Java.

2.      Weaknesses in organization

·     Small & medium industry still underdeveloped - low productivity  -  the number of workers still many (Solid Works)

·         Market Concentration

·         The capacity to absorb and develop technology is still weak

·         HR weak

1.5  Industrial Sector Development Strategy

Implementation of the industrialization strategy:

1.      The strategy of import substitution (Looking Inward).

Aims to develop domestic-oriented industries that can replace imported products Countries using this strategy is  Korea  & Taiwan

Consideration of using this strategy:

·         Natural resources and production factors provided enough

·         Potential domestic demand adequate

·         As the driver of the development of the domestic manufacturing industry

·         Employment opportunities become widespread

·         Reduction of dependency on imports, so that the deficit is reduced

2.      The export promotion strategy (Looking outward)

Oriented to the international market in the industrial development efforts the country has a competitive advantage.

Recommendation that this strategy to be successful:

·        The market must create the right price signals that reflect the scarcity of goods in question both input and output markets

·         The level of import protection should be low

·         The exchange rate must be realistic

·         There is an incentive for increasing exports

CHAPTER 2

CASE STUDY

Food & Beverage Industry Indonesia: Rising Consumption on Ramadan & Idul Fitri

        Turnover in Indonesia's processed food and beverage industry is expected to rise 10 percent (m/m) to IDR 440 trillion (approx. USD $32.4 billion) in the second quarter of 2016 from IDR 400 trillion in the preceding quarter. This growth is expected to come on the back of Islamic celebrations (Ramadan and Idul Fitri) that always trigger rising consumption. Although the Ramadan is the holy fasting month for Muslims - implying a focus on self-control - dinner and early breakfast 'parties' boost turnover in the nation's food and beverage industry.

       Adhi Lukman, Chairman of the Indonesian Food and Beverage Association (GAPMMI), said sales in Indonesia's food and beverage industry had risen 7.55 percent (y/y) in the first quarter of 2016 from the same period one year earlier. Lukman is optimistic that sales will continue to grow in the remainder of the year, supported by accelerating overall economic growth in Indonesia and improving purchasing power. According to the latest data from Statistics Indonesia (BPS), Indonesia's GDP growth accelerated from 4.73 percent in Q1-2015 to 4.92 percent in Q1-2016.

      The Ramadan month starts in early June, followed by the Idul Fitri celebrations in early July. In this period sales of syrup, cookies and bread tend to rise sharply in Indonesia. Idul Fitri - also known as Lebaran - marks the end of the fasting month. During this week-long national holiday millions of Indonesians living and working in urban regions travel back to their places of origin to spend a couple of days with their families (a tradition called mudik). As the millions of Indonesians who travel back to the regions carry trillions of rupiah (hundreds of millions of US dollars) with them (supported by the pay out of workers’ 13-month salary) Idul Fitri significantly boosts the money circulation in Indonesia, while spending on food and beverage products grows accordingly.

     Lukman expects sales in Indonesia's food and beverage industry to reach IDR 1,300 trillion in full-year 2016. He added that this industry is one of the country's key industries, contributing 30 percent to the nation's gross domestic product (GDP).

Excise Tax on Plastic Bottles and Plastic Packaging

     However, Lukman says one of the government's latest plans could jeopardize growth in the food and beverage industry. Earlier this year the government unveiled the idea to impose an excise tax of at least IDR 200 (approx. USD $0.02) on plastic bottles and plastic packaging in a bid to raise tax revenue and protect the environment by somewhat discouraging purchases of goods packed in plastic. According to Lukman this plan - if approved by the House of Representatives - would disturb sales volumes in the food and beverage industry because retailers will rise prices, while the attractiveness of Indonesia's investment climate as well as the country's competitiveness may be reduced. Triyono Prijosoesilo, Chairman of the Association of Indonesian Soft Drink Producers (Asrim), said sales volumes of packaged drinks are highly vulnerable to such price hikes.

Quick Overview of the Prospects in Indonesia's Food & Beverage Industry

     The food and beverage industry of Indonesia is attractive for both domestic and foreign direct investment as Indonesia's population numbers over 255 million individuals who all need to consume food and beverage products. In other words, there exists a huge market. Moreover, emerging markets - including Indonesia - are characterized by a rapidly expanding middle class segment (and rising per capita GDP). Given Indonesia is expected to show accelerated economic growth starting from 2016 onward, purchasing power should improve, implying that Indonesians will start to consume more products.

      Investment related to the food and beverage industry in Indonesia are largely focused on Java because this is the most populous island of Indonesia (and has good infrastructure compared to the other Indonesian islands)

Analysis :

     In the month of Ramadan and Eid, turnover in the food industry and beverage Indonesia is expected to increase 10 percent in the second quarter of 2016 from Rp 400 trillion in the previous quarter. According to the latest data from Statistics Indonesia (BPS), Indonesia's GDP growth accelerated from 4.73 percent to 4.92 percent in Q1-2015 Q1-2016.

    Ramadan this year starts at the beginning of June in this period sales syrup, cakes, and breads tend to increase sharply in Indonesia. Investments linked to the food and beverage industry in Indonesia is largely focused on Java because it is the most densely populated island in Indonesia (and has a good infrastructure compared to other islands in Indonesia).

BIBLIOGRAPHY

kuswanto.staff.gunadarma.ac.id/.../7-INDUSTRIALISASI+DAN+PERKEMBANGAN....

http://www.indonesia-investments.com/business/business-columns/food-beverage-industry-indonesia-rising-consumption-on-ramadan-idul-fitri/item6849