EU, Indonesia's major trading partner<\/p>\n
Over the past two decades, trade and investment ties between
\nIndonesia and the European Union (EU) have grown rapidly, during
\nwhich Indonesia has embarked upon an export diversification
\npolicy. This means new types of export products have become
\navailable and found especially strong demand in European markets.
\nAs a result, the EU's share in Indonesian exports grew from 6
\npercent in the mid-1980s to 16 percent now.<\/p>\n
By the early 1990s, the EU had become the second export
\ndestination for Indonesian products after Japan. Europe's imports
\nhave also grown rapidly and now constitute 22 percent of
\nIndonesia's total imports. The EU is the second most important
\nsource for Indonesia's imports.<\/p>\n
An economic crisis that struck Indonesia in late 1997 has had
\na powerful impact on the amount and composition of trade between
\nIndonesia and the EU. The European statistical agency Eurostat
\npoints to a healthy growth of 9 percent in Indonesian exports to
\nthe EU from January to November 1998. Taking into account the
\ndevaluation of the rupiah against European currencies, this
\nimplies a significant increase in the volume of goods traded.<\/p>\n
The crisis has meant a shift in the sectoral composition of
\nIndonesian exports. In agricultural, palm oil exports were hit by
\nthe imposition of an export levy, and by October 1998 declined by
\n19 percent. In the manufacturing sector, Indonesian textile and
\nfootwear exports are under pressure. The pulp and paper sector in
\ncontrast, is growing to become a major export category.<\/p>\n
Following the collapse of the rupiah in January 1998,
\nIndonesian imports from the EU dropped by more than half in two
\nmonths. After this initial steep fall, imports have held roughly
\nstable at a new level of about euro (EUR) 300 million per month.<\/p>\n
One import category that has done well is machinery and
\ncapital goods. Imports from Europe which experienced above
\naverage decline are luxury goods, industrial inputs such as steel
\nand plastics and high-tech equipment.<\/p>\n
EU trade links are sometimes underestimated because the EU
\nconsists of 15 different countries. Looking at these
\nindividually, they do not seem major partners. Unified in the
\nsingle European market, however, they form the world's largest
\ntrading bloc.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/eu-indonesias-major-trading-partner-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}