Fri, 16 Nov 2007
From: The Jakarta Post
By Andi Haswidi, The Jakarta Post, Jakarta
Indonesia improved its share of world trade last year thanks largely to a surge in the prices of the country's main commodities, according to the latest report from the World Trade Organization (WTO).

The country's share of total global exports increased to 0.9 percent from 0.8 percent in 2005, with year-on-year export growth jumping by 19 percent from US$86.2 billion to $103.5 billion.

Meanwhile, total world exports stood at $12 trillion last year, with Germany leading the way with exports worth $1.1 trillion, followed by the United States on $1 trillion and China on $968.9 billion.

In terms of ranking, despite lagging behind two other countries in the Southeast Asia region -- Singapore in 12th place and Malaysia in 19th -- Indonesia managed to maintain its position as the world's 31st biggest exporter.

The WTO report was officially published earlier this week.

The country's 2006 trade performance was largely due to higher global prices for key commodities, such as oil, minerals, palm oil, rubber and iron.

An increase in volume, although slight, also contributed to the growth, said the report.

"We also saw considerable increases of volume for both primary commodities and manufactured products in 2006," Trade Minister Mari Elka Pangestu told The Jakarta Post on Thursday, commenting on the report.

"That means that significant investments came onstream despite the problems affecting the investment climate," she explained, referring to issues that lead to the high cost of doing business here.

"Our main strategy now must be focused on maintaining the growth in investment in areas where (export) results can be felt directly within three to six months. The second is to resolve the bottlenecks caused by inadequate infrastructure," Mari said.

The third step, she explained, would be to focus on the challenges posed by a possible slowdown in the global economy resulting from record global oil price and the fallout from the U.S. subprime mortgage crisis.

"Signs of the slowdown can already be felt. Our export growth to the U.S. has weakened to roughly 5 percent from the usual 9 percent," she revealed.

To mitigate the impact on export growth, she said her officials had embarked on a market diversification drive this year, focused on first-tier destinations such as China, India and South Korea.

"The second-tier countries include the Central European countries, Russia and the Middle East, as there are plenty of construction projects going on there."

By the end of this year, Mari said she expected to see at least 14 percent growth in total exports, and predicted 14.5 percent growth for 2008.

In the meantime, total exports as of the end of September had reached $83 billion, representing an increase of 12.88 percent compared to the same period last year.



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