Indonesia has managed, at least for now, to avoid grave impacts from the U.S. economic slowdown, as it is less dependent on the United States and has diversified its non-oil and gas exports, a report revealed Thursday.
The United States is the world's biggest importer and a slowdown in its economy was predicted to hurt export-dependent countries such as Indonesia.
However, a mid-year review of Indonesia's economy by the Institute for Development of Economics and Finance (Indef) shows that the country has so far managed to compensate for a decline in exports to the United States with a rise in exports to other countries.
"Previously, Indonesia mainly exported to the U.S., Japan and Singapore. But now we export to more countries like Malaysia, South Korea and the EU member states," M. Ikhsan Modjo, Indef director, said during the launch of the review.
"The more diversification we have, the better because when one of our buying countries faces economic downturn, our sales are still compensated by other countries," he said.
Ikhsan said that although the value of exports to the United States rose, the proportion of Indonesia's overall exports decreased.
According to the Central Statistic Agency (BPS), Indonesia exported one-tenth more non-oil and gas products to the U.S. for the first five months of this year at $1.5 billion compared to last year.
But its percentage of total non-oil and gas exports actually dropped. Last year, it stood at 17 percent, far higher than the average of 11.5 percent in the first five months of this year.
Outside the U.S. market, rising markets are the ASEAN member countries and non-traditional markets like South Korea, China and the Middle East.
Indonesia has sold almost a quarter of its non-oil and gas products to ASEAN member countries, mainly to Singapore and Malaysia.
Up to May, sales reached $10 billion, from $7.5 billion for the same period last year. Trade with Malaysia was almost doubled to $2.6 billion, with Singapore's down by one-fifth, while trade with other ASEAN countries rose by more than a quarter.
"The trade among ASEAN countries is booming especially after the implementation of ASEAN Free Trade Agreement in 2003," Ikhsan said.
Aside from the ASEAN country members, the country's exports to 11 non-traditional partners rose from 28 percent of total trade by the end of last year to 39 percent in the first five months of 2008.
Despite the overall non-oil and gas growth of 22.3 percent, the ministry of trade revised the export target from 14 percent to 13.5 percent last month, in anticipation of a global economic slowdown and higher fuel prices at home.
Not only helped by the increasing number of trade partners, Indonesia also saw trade being boosted by its agricultural products, Ikhsan said. (mri)