East Java exports reach the highest rate ever<\/p>\n
SURABAYA: During January to September this year, East Java's
\nexport rate increased 38.85 percent. The total volume of exports
\nreached more than 300 million tons worth US$3.8 billion.
\nAccording to Kresnayana Yahya, a statistician, it is the best
\nrate ever. The monetary crisis and the depreciation of the rupiah
\ncould be the main reasons for the success story.<\/p>\n
But there are other factors too. \"Industry in East Java is
\nconsistent with products that are in demand. Despite the crisis,
\nit has succeeded in maintaining the continuity of production,\"
\nexplained Agus Hariadi, head of the foreign trade section at the
\nEast Java Department of Industry and Trade.<\/p>\n
It is not an easy job for exporters, because to maintain
\ncontinuity of production they must have access to raw materials.
\nThe problem is, a lot of raw materials needed for industry in
\nEast Java are imported from other regions\/provinces, as well as
\nfrom other countries. As Hariadi explained, East Java's export
\nproducts are resource based; topping the list are marine and
\nagricultural products.<\/p>\n
\"Actually, our strength is that we have a rich variety of
\nexport products. There are more than 1,500 kinds of export
\nproducts from East Java,\" said Hariadi. These products are
\nexported to some traditional markets like Japan, Singapore and
\nthe U.S. \"But recently we have been developing new markets. Now
\nthere are more than 140 other countries to which we export,\"
\nadded Hariadi proudly.<\/p>\n
The main export products are paper, household wares, wood,
\nmarine products, copper, footwear, chemicals, plastics, tobacco,
\ncoffee, tea and spices. East Java is also different from other
\nprovinces in Indonesia, some of which are richer in natural
\nresources, because the province's products have added value. For
\ninstance, East Java exports finished products such as furniture
\nrather than logs or rattan. It also exports fashioned jewelry
\nrather than pure gold.<\/p>\n
Export obstacles<\/p>\n
But exporting does not just entail selling to foreign
\ncountries. It includes importing raw materials, producing,
\ndelivery, transportation, banking, insurance, etc. Rudy
\nWicaksono, chief of the foreign trade section at the East Java
\nChamber of Commerce (Kadin), is concerned that export activities
\nare dominated by foreign investors. \"Our small industrial
\nentrepreneurs are still being left behind,\" he said.<\/p>\n
To reduce the gap, East Java Kadin initiated an e-commerce
\ncampaign. \"We want to educate small entrepreneurs in the regions
\nabout electronic trading.\" But such a program needs support,
\nespecially from local governments. \"Without any attention from
\nthe government, it won't work,\" said Rudi.<\/p>\n
In Rudi's opinion, there should be less exhibitions and trips
\nabroad by government officials. They are costly and there is no
\nguarantee of effectiveness. The budget from the annual regional
\nbudget (APBD) that normally goes to this kind of activity should
\nbe directed at the education and training of small entrepreneurs
\nto enter the global and open markets.<\/p>\n
Another obstacle that should be considered is the fact that
\nEast Java's export products rely on natural resources. \"In the
\nlong term, the prospect is not good, especially if we are too
\ndependent on raw materials from other regions or other
\ncountries,\" said Kresnayana.<\/p>\n
To make furniture for export, East Java imports wood and logs
\nfrom Central Java and Kalimantan, and to export paper products,
\nsome raw materials are imported from other countries. According
\nto Kresnayana, East Java should follow other provinces, like West
\nJava and Jakarta, in exporting knowledge and technology-based
\nproducts.<\/p>\n
Rudi Wicaksono agrees. \"These kinds of products can compete in
\nthe global and open markets in the 21st century. It is important
\nfor everybody to know that transfer of knowledge and technology
\nis as important as collecting money (devisa) and creating job
\nvacancies.\"<\/p>\n
But the most difficult problem to handle is transportation.
\nAccording to Kresnayana, 97 percent of ships are owned by foreign
\ncompanies. He is not surprised that there are not many people
\ninterested in investing in transportation. \"There were too many
\nregulations, paper work and fees in the New Order era. It was
\nsimpler to just rent foreign ships to deliver our export
\nproducts.\"<\/p>\n
Prospects<\/p>\n
However, there are still good prospects for some traditional
\nexport products and some new products. Among the newly developed
\nproducts are wooden household wares. \"There is a significant
\nincrease in exports of wooden household wares,\" Kresnayana said.
\nThis is interesting because the raw materials for these wares
\nhave very little value. Wood scraps, coconut trunks and coconut
\nhusks. With a creative design, products made from these raw
\nmaterials now sell well.<\/p>\n
\"It proves that design matters. Our gold also sells well as
\ndesigned products,\" added Kresnayana.<\/p>\n
The role of trade sections in Indonesian embassies have been
\nquestioned, not only by Kadin, but also by Kresnayana, who is
\nalso a member of the Indonesian Managers Association.<\/p>\n
\"For all those years, trade sections have not functioned as
\nexpected. Most foreign trade is done directly by the
\ntraders\/exporters, without the involvement or the help of the
\ntrade section,\" said Kresnayana. Rudi Wicaksono suggested that
\ntrade section in embassies be abolished. \"Or they should be a
\ncombined team of government officials and experienced exporters.
\nThey (the exporters) are the ones who know where to sell the
\nproducts, how to create new markets, and to innovate new export
\nproducts,\" said Rudi. (Sirikit Syah)<\/p>",
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