Indonesia’s Reindustrialization Push a ‘Game Changer’, Says Development Minister
Main Takeaways
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TANGERANG, Investortrust.id — Indonesia’s Minister of National Development Planning Rachmat Pambudy has called reindustrialization a “game changer” for the nation’s economy, urging a renewed focus on high-value manufacturing to lift the country out of the middle-income trap.
Speaking at a national seminar on Indonesia’s industrial outlook, Rachmat said the government aims to restore the contribution of the manufacturing sector to more than 20% of GDP—its level before the 1997-1998 financial crisis.
“We want to return to a manufacturing-driven economy. Reindustrialization is the game changer to raise economic growth and escape the middle-income trap,” Rachmat said at the event hosted by the Institution of Engineers Indonesia (PII) in ICE BSD, Tangerang on Saturday, July 5, 2025.
Currently, Indonesia’s manufacturing sector accounts for less than 20% of GDP, despite being central to employment and value creation. Rachmat warned that without reindustrialization, the economy risks becoming mired in low-income, low-skill labor.
Engineers, Universities Key to Industrial Innovation
Rachmat emphasized the crucial role of engineers and research institutions in creating a modern industrial ecosystem. He cited potential breakthroughs from agricultural waste, such as transforming rice husks into graphene—a high-conductivity material used in electronics, energy systems, and semiconductors.
“Our value-added from rice is still very limited—mostly just fried rice. But the straw and husks? Those can become charcoal and carbon. With proper research, husks can yield graphene,” he said.
He urged leading Indonesian universities, including Bogor Agricultural University (IPB) and Bandung Institute of Technology (ITB), to collaborate on nanotechnology and organic graphene development.
“If processed through nanotech, organic graphene could be revolutionary—and expensive. Why shouldn’t we lead that innovation?” he asked.
Rachmat also challenged engineers to identify strategic sectors that could give Indonesia a competitive edge in the global economy, especially in areas overlooked by other countries.
PII: Engineers Must Lead
The event was organized to mark the 73rd anniversary of the Institution of Engineers Indonesia. PII Chairman Ilham Akbar Habibie presented a plaque to Minister Rachmat, highlighting the importance of engineers in shaping technological sovereignty and national resilience.
Also in attendance were Head of Statistics Indonesia Amalia Adininggar Widyasanti, Secretary General of the Ministry of Manpower Cris Kuntadi, and several senior engineers from PII.