Ilham Habibie: Without a Strong Industrial Base, Indonesia Will Never Become a Developed Nation

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JAKARTA, investortrust.id — Ilham Akbar Habibie, Chairman of the Institution of Engineers Indonesia (PII), has underscored that building a strong industrial base is a non-negotiable requirement for Indonesia to achieve developed nation status.

"Without a strong industrial base, no country can become strong," Ilham said in his keynote speech at the national seminar Outlook on Indonesia’s Industrialization, hosted by PII at ICE BSD in Tangerang on Saturday, July 5.

Ilham noted that Indonesia’s industrial performance remains concerning. “Our economy still heavily depends on raw commodities like coal, palm oil, and nickel ore,” he said.

This dependency, he argued, leaves Indonesia vulnerable to global price shocks and robs the country of value-added opportunities that should be developed domestically.

As a result, he pointed out, manufacturing contributes less than 20% to Indonesia’s gross domestic product (GDP), far short of the 23% target set in the National Medium-Term Development Plan (RPJMN) for this year.

“Compared to other Asian nations, we’re lagging behind. China’s manufacturing share is around 28%, Vietnam’s is 25%, and Thailand’s is 27%,” he said.

Ilham warned that Indonesia would not be able to reach its goal of 8% annual GDP growth without expanding its industrial footprint.

“We at PII believe such growth is only achievable if industry plays a much larger role,” he stated.

A Call for Modern, Innovative Reindustrialization

Ilham emphasized that Indonesia is facing a case of premature deindustrialization—a decline in the industrial sector before it has matured.

“This is deeply worrying and runs counter to the government’s aspiration of high economic growth,” he said.

PII, he added, is committed to refreshing the nation’s industrial vision. “We must pursue reindustrialization. What we’ve been experiencing is the opposite—deindustrialization,” he asserted.

Ilham also stressed the importance of quality employment, which he said only industry can provide in a sustainable and formal manner. “We invite all stakeholders—government, academia, business leaders, and engineers—to rebuild our industrial foundation together,” he urged.

Reindustrialization, he said, must be modern, innovation-driven, and aligned with sustainable development principles.

“The industries of the future will not resemble those of the past. They must be sustainable, human-centric, and adhere to green, blue, circular, and regenerative economic principles,” he explained.

As the head of the national engineering body, Ilham highlighted the crucial role of engineers in driving this transformation.

PII, he said, has drafted strategic recommendations to support this goal, including strengthening technical education, boosting the number of internationally certified engineers, and developing an ecosystem for industrial innovation.

“Engineers do more than build factories and infrastructure. They educate students and shape the labor force. Their role is absolutely essential,” he concluded.