The government should focus on attracting investment in manufacturing following the sector's declining contribution to the country's gross domestic product (GDP) over the past three years.
Faisal Basri, an economist from the University of Indonesia, said on Tuesday that the government should prioritize investment in manufacturing since the sector was an important pillars of Indonesia's economic growth.
“This sector absorbs a huge number of workers, so it helps the government curb unemployment problems,” he said at a discussion in Jakarta on Indonesia's investment climate for 2011.
He said ideally manufacturing should keep pace with economic growth whereas in Indonesia the sector's contribution to GDP declined as economic growth increased.
According to the Central Statistics Agency, manufacturing comprised 27 percent of the nation's GDP in 2008 before falling to 26.4 percent in 2009.
Manufacturing dwindled to 24.8 percent of GDP in 2010 - its lowest level in a decade.
Indonesian Employers Association (Apindo) chairman Sofjan Wanandi agreed with Faisal, saying that the Investment Coordinating Board (BKPM) should work harder to promote Indonesia as an investment destination for manufacturing businesses.