Export Value of Weaving and Batik Industry Skyrocketing, Airlangga: The Patterns Have Meanings and Stories

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The industry of weaving and batik cloths is able to contribute significantly to the national economy with an export value reached US$ 151.7 million in 2016. As the major contributor to the growth of the creative industry, the artisans of Indonesian traditional cloths have been encouraged to continue to improve the productivity and innovation in order to be more competitive in domestic and international markets.

“The Ministry of Industry is boosting the performance of export-oriented and labor-intensive industries because they provide significant multiplier effects for the distribution of public welfare, one way is by the employment,” said Industry Minister Airlangga Hartarto at the opening of the Adiwastra Nusantara 2017 exhibition in Jakarta on Wednesday (4/5).

The minister said that his ministry has selected 10 industries of labor-intensive and export-oriented as the priority for development this year, one of them is the creative industry. The others are the industries of footwear, textile and textile products, food and beverages, wooden and rattan furniture, electronics and telematics, finished goods of rubber, pharmaceuticals, cosmetics and traditional medicines, miscellaneous industry, as well as the processing industry of fish and seaweed.

The ministry noted that the creative industry accounted for about Rp642 trillion or 7.05 percent to the total GDP of Indonesia in 2015. The largest contribution came from the culinary sector as much as 34.2 percent, followed by fashion 27.9 percent and handicraft 14.88 percent. In addition, the creative industry is the fourth largest sector in term of employment nationwide, with its contribution reached 10.7 percent, or 11.8 million people.

Airlangga said he was optimistic about the potential of the industry of batik and weaving cloths, supported by the richness of Indonesian culture that continues to generate various types of wastra (traditional fabrics) in each region with different characteristics. “Wastra Nusantara is the traditional fabrics which are laden with cultural values. The motifs are made to have meanings and stories of the history and customs of the local community,” he said.

On the occasion, the minister invited the fashion industry players in the country, mostly small and medium enterprises (SMEs), to join and take advantage of the e-Smart SME program which has been launched by the Ministry of Industry on January 27, 2017. “With the e-Smart SME program, they can expand their market access through the marketplace and will get guidance from our various programs,” he said.

Furthermore, to encourage the national SME products able to penetrate export markets, the government has to provide a facility to make import of raw materials for export purposes easy (KITE) as well as the financing facility through the Indonesian Export Financing Agency (LPEI). “This exhibition is also expected to promote the products of Indonesian traditional fabrics made on the basis of culture and intellectual property to eventually realize the growth of the national fashion industry,” said Airlangga.

SME Director General of the ministry Gati Wibawaningsih said until now there are 369 centers of weaving cloth SMEs and 101 centers of batik SMEs throughout the territory of Indonesia. “In the past few years, Wastra Nusantara has been morphing into a variety of fashion products, crafts and home decorations with higher added value,” he said.

Based on BPS data processed by the SME Directorate General of Industry Ministry, the SMEs continue to increase the value added of the country significantly every year. This is evident from the achievements in 2016 amounted to Rp520 trillion, up 18.3 percent compared with 2015. Meanwhile the added value of SMEs increased from Rp373 trillion in 2014 to Rp439 trillion in 2015, up 17.6 percent.

Strategic Efforts

Gati said various strategic efforts have been undertaken to boost the productivity and competitiveness of SMEs nationwide, among others by increasing the partnerships of the SMEs with the domestic textile industry to meet their needs on raw materials, as well as enhancing the competence of human resources and product quality through technical guidance and mentoring by experts.

The other measures are increasing the use of new technologies through the restructuring of machinery and production equipment, improving the access of marketing through the facilitation of sales or exhibitions, and increasing the access to capital through credit program (KUR) and the banking and non-banking financial services.

“Especially for the KUR, we encourage them to make a special scheme for the industry referring to the models of Small Investment Credit (KIK) and Permanent Working Capital Loan (KMKP),” said Gati. According to her, this particular scheme is important to accommodate the industry’s special financing needs.

With a variety of strategic programs, it is expected to encourage the growth of new entrepreneurs as many as 5,000 and 1,200 new SME development centers in 2017. “We are targeting to reach 20,000 new entrepreneurs in 2019. In a bid to become a developed industrial country, the number of entrepreneurs has to be two per cent of the population, and now we have only a half,” said Gati.

The Ministry of Industry is also swiftly boosting the quality of education and training for enhancing the competence, productivity and competitiveness of the Indonesian human resources at the international level, in line with the government’s Nawacita program to achieve the independence and sovereignty of the nation’s economy. One of the concrete steps currently running is the development of vocational education by involving the cooperation of government and private institutions.

Especially for the programs to strengthening the industrial human resources through vocational education, the Ministry of Industry will launch again the vocational education program for industry in Central Java and D.I. Yogyakarta, after the success in East Java late last month. In this second phase, it is targeted to establish cooperation between 368 vocational schools with 108 companies. Gradually the program will be launched in the provinces of West Java, Jakarta, Banten and North Sumatra this year.

Based on the calculation of the Ministry of Industry, with the average industry growth of 5-6 percent per year, it will need 500-600 thousand new workers per year. The ministry has targeted to produce skilled workers by certifying 220 thousand workforces in 2017. This effort aims to reach one million skilled workers until 2019 according to the needs of industries. (Ministry of Industry)