Strengthen Domestic Industry, Agrinas Should Not Import Commercial Vehicles
Out of the blue, we were surprised by the plan of PT Agrinas Pangan Nusantara (Agrinas) to import 105,000 commercial vehicles from India. This corporate action, funded by the state budget (APBN), needs to be reconsidered.
President Prabowo has initiated various priority programmes such as MBG and KDPM, one of whose objectives is to strengthen the domestic economy, especially to stimulate the rural economy.
MBG and KDMP are expected to boost demand for food products that can be supplied from villages. To meet this increased demand, the Ministry of Agriculture needs to improve agricultural productivity from the upstream side.
In this way, the circulation of the economy in the villages will grow, and this will naturally reduce the need for imported food products. This economic architecture should be fully understood by the president’s subordinates, including those in state-owned enterprises (BUMN).
The plan by PT Agrinas to import 105,000 commercial vehicles from India indicates that they have not fully understood the president’s way of thinking. Let’s just look at the data: since 2011, the growth of the manufacturing industry has always been below the growth of GDP.
In fact, the manufacturing sector should be our mainstay in developing the downstream sector from natural resources (SDA). The manufacturing sector can also be a source of employment for graduates from various universities. In reality, more than 1 million of our graduates are unemployed.
Come on, BUMN needs to think about this too. The plan to import 105,000 commercial vehicles will actually harm the national economy.
Calculations by Celios, published by various media outlets, mention the potential losses from the plan to import these vehicles, including: eroding GDP by IDR 39.29 trillion, reducing people’s income by IDR 39 trillion, cutting the surplus in the automotive industry by IDR 21.67 trillion, reducing the income of workers throughout the automotive industry’s supply chain by IDR 17.39 trillion, and reducing net tax revenue by IDR 240 billion.
Did PT Agrinas have any communication with domestic manufacturers, for example, with Gaikindo? The procurement of 105,000 commercial vehicles is almost equivalent to the production of commercial vehicles throughout 2025.
Imagine if the procurement of vehicles by PT Agrinas could be done domestically. This step would boost the domestic automotive industry, create new jobs, and have other economic ripple effects.
The plan to purchase these vehicles uses the APBN and is multi-year. Given the limited fiscal space in the APBN structure, every purchase of goods and services using APBN funds should consider the economic benefits.
It may be that the purchase price from India is cheaper, but has the after-sales service been considered, as well as the availability and reach of spare parts and workshops? If we consider all of this, it may turn out to be more expensive than the initial intention of efficiency.
The consideration of efficiency is only one thing; another strategic aspect to be used as a basis is whether the programme will stimulate the domestic industry or not. Referring back to the president’s way of thinking, every step must have a basis for strengthening the domestic supply chain or not.
By choosing the import route, PT Agrinas is clearly turning away from the path of strengthening the national industry. In fact, domestic producers need greater demand so that their industries can grow more expansively.
I deeply regret that APBN funds are being spent but do not provide added economic value for the people in the country. It would be wiser not to reconsider this step, but to cancel it.
Said Abdullah, Chairman of the Budget Agency (Banggar) of the Indonesian House of Representatives (DPR RI)
(akd/akd)