Indonesia-Sri Lanka Strengthens Cooperation in Railway Sector

President Joko Widodo took a picture with Sri Lankan Prime Minister Ranil Wickremesinghe after holding a meeting on the sidelines of the World Economic Forum

JAKARTAIndonesia and Sri Lanka are determined to strengthen cooperation in the industrial sector to improve economic growth of the two countries. This agreement is the result of a meeting between President Joko “Jokowi” Widodo and Sri Lankan Prime Minister Ranil Wickremesinghe on the sidelines of the World Economic Forum (WEF) on ASEAN in Hanoi, Vietnam.

Minister of Industry Airlangga Hartarto said that the government had offered ‘Complete Package’ cooperation to Sri Lanka to build railway facilities and infrastructure in the country. “So it is not only selling railroad cars, but also offering signaling systems, rails, to depots and stations,” he said.

He added Indonesia is currently one of the biggest players in the manufacturing of railway facilities in Southeast Asia. Indonesia’s domestic railroad industry products have been able to fulfill domestic, even overseas market orders, especially in developing countries and regional markets.

“We continue to spur the national railway industry in order to dominate the domestic market and increasingly play a role in the supply chain of the railroad industry for the global market,” Airlangga said in his official statement in Jakarta on Thursday (9/13/2018).

For this reason, the Ministry of Industry has encouraged state-owned railway manufacturer, PT INKA, to continue to conduct coaching activities for small and medium-scale component industries so that they can produce products of a standard quality and can be used in the railroad industry.

Furthermore, the Minister of Industry said that the domestic railway supporting industry has been able to produce around 70 percent of the total component requirements, including the railroad frame. “We hope that in the next two to three years, the industry is capable of up to 80 percent of the total needs,” he said.

The Ministry of Industry also actively spurred the national railroad industry to continue to innovate technology, especially for export-oriented products. In addition, it proactively establishes business cooperation and promotion in order to increase market access to countries that have a large enough market potential, especially in Asia such as Pakistan, Sri Lanka, Bangladesh, Philippines, Malaysia, Thailand, Zambia, Nigeria and Egypt.

In addition to the railroad sector, the Governments of Indonesia and Sri Lanka also followed up on previous agreements in the trade sector. One of them is the joint efforts of the two countries to export ready-made garments to the European Union.

Based on Making Indonesia 4.0 road map, the textile and textile products (TPT) industry is one of five manufacturing sectors that are being prioritized as pioneers in the road map for the application of the fourth industrial revolution.

The national textile industry has high competitiveness because its manufacturing structure has been integrated from upstream to downstream and its products are also known to have good quality in the international market.

The Ministry of Industry noted that 30 percent of ready-made garments from the national textile industry are to meet the needs of the domestic market, while 70 percent is for export.

The export value of the national textile industry reached $12.58 billion in 2017, up six percent compared to the previous year. In addition, this sector contributes IDR150.43 trillion to GDP in 2017.