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Home News Manufacturing Industry in Madura
Manufacturing Industry in Madura
Monday, 03 May 2010 09:17
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Yuwono B Pratiknyo
Ubaya Manufacturing Engineering Department lecturer

The operation of Suramadu Bridge is expected not only to boost economy of East Java but also economy of Indonesia. Manufacturing industry presumably is one element to boost economy. It will be really unfortunate if Suramadu Bridge is only used to connect Java and Madura Island and can not contribute significant impact to Java & Madura Island and is only used to connect Java and Madura Island.

People can not blame BPWS considering BPWS as a new institution. Ideally, if BPWS was established long time before Suramadu Bridge finished, BPWS contribution might be higher. Economy and welfare of Madura Island might be higher considering BPWS working plan in short term that focuses on infrastructure development including harbor and container terminal, fresh water, road widening and electricity & telecommunication network development.

In future, infrastructures in Surabaya and Madura are expected to be better. Besides infrastructure development, BPWS also intends to organize program to improve the quality of human resources in Madura. Then, next question is where can those skilled workers work? The possible solution is manufacturing industry.

Front Line
In the flat world era that is driven by globalization and liberalization, manufacturing industry has been a front liner in facing such mondial competition.

Singapore as an excellent example. Singapore’s efforts in restoring its economic condition began to show the impact. In the last 2 years, economy of Singapore grew because of manufacturing industry.

Indonesia as a country which also affected by current global crisis can actually use this condition as a momentum to develop its manufacturing industry. As a matter of facts, in 2008, manufacturing industry with its contribution of 27.9% is the largest contributor to Indonesia Gross Domestic Product (GDP). This percentage is far above its lower ranks of agriculture (14.4%); trade, hotels, and restaurants (14.0%); and mining & quarrying (11%). (Source: BPS).
Despite manufacturing industry sometimes gets struggle, but it still grows in positive trend. This may be contrary to American manufacturing industry that dramatically decreased. One factor that makes our manufacturing industry is not suffered is because most Indonesian company is not an export oriented and does not depend on imported raw materials. It is true that export-oriented companies generate high income, but keep in mind that the current global crisis is also affecting other countries which could be ascertained, it affects the export market. That’s the reason why companies who focus on domestic market are growing.

Considering the current conditions, there are 3 sectors that are tradable in the globalization era. They are agriculture; manufacturing’ and mining & quarrying sector. By looking on Madura condition, the first sector of agriculture is impossible to be nurtured because the land condition of Madura is not as good as Java Island.

Mining and quarrying are not as big as Kalimantan island of Borneo which produces a lot of mines. So, the only industry sector that prospective for Madura is manufacturing industry. If people consider Batam as a center for export oriented manufacturing companies, then investors can develop Madura as a center for domestic oriented manufacturing companies.

Why domestic oriented manufacturing companies will be profitable? Current Indonesian population is 250 million. This big population will attract foreign products to enter Indonesian market. In fact, the increase of competitiveness and profit maximization will be the basis for the movement of goods and services. Considering that, it is appropriate to develop Madura as “The Center of Manufacturer” in Indonesia.

Firstly, the location of Madura Island is strategic. Its location on the middle of Indonesia eases the process of distribution. Market in East including Java Island and West Indonesia can easily be reached. Secondly, there are many unexploited area in Madura that can be further exploited. Thirdly, the welfare of Maduranese. Maduranese needs employment on formal sector.

Strengthening manufacturing industry will give strong impact on economy. The economic structure will be stronger because primary sector grows so that the improvement process of value also increases, which in turn will increase the rate of productivity and real wage rate.

Moreover, the relative increase on manufacturing sector will accelerate the base of tax object and increase the sustainability of tax ratio. Increased government revenue will in turn create a stronger macroeconomic foundation and improve government function.

Agriculture based manufacturing industry
The development and improvement of manufacturing industry would be in line with the increased of income, average education level of population, and changes in demographic composition. In addition, it leads to the decreased number and worker proportion in agricultural sector. Something that must be considered is despite Indonesia is spacious with abundant natural resources, the fact shows that Indonesia is still a net importer of rice, sugar, soybeans, meat and other agricultural products.

This fact signifies that something is going wrong with our system. The price of fertilizer is expensive, the lack of agricultural workers and the low quality of agricultural products are 3 factors that forces Indonesia to be an importer.

Economic development will grow if there is connection between these two sectors (agriculture-based manufacturing industry). Agricultural and industrial sector are not an option, but rather something that must be synergized. Until when these two sectors synergized? Surely, until certain point when these two sectors have reached the optimal point, then the modern service sector can contribute more roles.

It is very possible and relevant to develop Madura as “The Center of Manufacturer” in Indonesia. However, people should also start to consider the negative impacts that may arise. In addition, the uniqueness of Madura Island as a religious island must also be maintained. Maduranese should contribute active roles in Madura. In future, manufacturing industry is believed will be a source of income to Indonesia in general and Madura Island in particular.

quote from http://www.surya.co.id, 30 Oktober 2009