Only one third of manufacturers in Indonesia still operating

May 04, 2020 | 08:58

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Factory activity has collapsed with only one third of manufacturing companies and workers operating at present due to COVID-19, Indonesian Coordinating Economic Minister Airlangga Hartarto has said.

only one third of manufacturers in indonesia still operating

Illustration of a car factory (Photo: Shutterstock)

Speaking at a recent online briefing, he said that only 15,000 manufacturing companies were still operating at present out of a total of 40,000 as usual.

Meanwhile, 4.7 million workers in the manufacturing sector are still working out of the usual 17 million in the sector, which contributes around 20 percent of the country’s gross domestic product, the minister added.

He voiced his hope that companies will be back in operation when the situation returns to normal.

Many businesses in Indonesia have temporarily shut down or are functioning at minimum capacity to comply with the government’s stay-at-home order to contain the fast-spreading pandemic.

The country's Purchasing Managers' Index (PMI) recorded a contraction to 45.3 from 51.9 between February and March, the steepest decline since the survey began in 2011.

Moreover, about 2.2 million people are out of work, according to Manpower Ministry data last updated on April 20.

The Indonesian government has launched tax incentives for the manufacturing industry, including individual income tax exemptions, import tax deferrals and corporate tax discounts.

Earlier in April, the government launched the pre-employment card programme, a mix of unemployment benefit and skill-training programme.

The government has also reduced employment insurance payments for companies that keep on their workers. Firms can get 90 percent reductions both for work accident and life insurance payments.

VNA

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