Trade associations representing exporters say they are dismayed by the lack of state help in opening up new markets, and are urging the government to devise a strategy to help them cope with the slump in demand from traditional export destinations.
“With most of our exporters still struggling on their own to find alternative markets, the association doesn’t see any sign of serious efforts on the part of the government to help us create new markets for domestic furniture and rattan products,” Hatta Sinatria, the chairman of the Indonesian Rattan Furniture and Craft Association (Amkri), said on Thursday.
The country’s main overseas markets for manufactured goods continue to be the United States, the European Union and Japan.
He said that cultivating new markets was costly for small firms and their associations, most of which lacked the funds to conduct effective market research and promotional efforts abroad.
“While trade promotions have been sponsored by the government in the past, these have not been specifically aimed at winning new markets,” Hatta said.
Instead of promoting the export of finished rattan products, he added, the government has been focusing solely on the promotion of unprocessed rattan at overseas trade expos.
“Without a clear focus on using trade promotions to benefit manufacturers and serious efforts to maintain the supply of rattan raw materials, the furniture industry could well collapse within five years,” Hatta said. “There need to be major changes in government policy.”
He said that manufacturers of rattan-based products exported goods worth about $320 million per year, but that the figure was likely to drop by 20 percent in 2009.
The Indonesian Furniture Industry and Handicraft Association (Asmindo) has estimated that total furniture exports for 2009 may drop 35 percent from last year, to $1.69 billion.
Amkri’s call for more effective overseas promotion was echoed by the country’s textile and footwear industry associations.
“To date, overseas trade promotions, including trade exhibitions in the textile sector, have been badly designed and not targeted at opening up new markets for domestic producers,” said Ernovian G Ismy, the executive secretary of the Indonesian Textile Association (API).
In addition, he said, some of the countries picked for exhibitions had little or no chance of becoming markets for Indonesian textile producers.
The country’s textile exports are believed to have dropped to $1.71 billion in the second quarter of this year from $2.22 billion in the first quarter.
Meanwhile, Chris Kanter, deputy chairman for investment and transportation at the Indonesian Chamber of Commerce and Industry (Kadin), said last week that the chamber was very concerned about what he called “a lack of coordination” between government agencies.
“Each ministry and government institution has its own programs that are not integrated so as to collectively support the industrial sector in promoting trade and investment,” he said.
Specifically, he criticized the performance of the government’s Export and Investment Promotion Committee (PEPI), saying that it had so far done little to support exporters struggling to stay afloat amid the global economic meltdown.
He stressed that it was essential for PEPI to be run by qualified individuals who were committed to boosting exports and had the capacity to create a more conducive investment climate.