War jitters already hurting RI export: Businessmen<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Tension evolving in the run-up to imminent war in the Gulf has
\nalready dealt a blow to the country's exports, causing fear that
\nIndonesia will not be able to reach its export target growth this
\nyear, businessmen said on Friday.<\/p>\n
Many buyers in Europe, Africa and the Middle East have stopped
\norders for the country's prime manufacturing commodities such as
\ntextiles and footwear.<\/p>\n
Deputy chairman of the Indonesian Textile Association (API)
\nLili Asdjudiredja told The Jakarta Post that textile orders,
\nwhich usually reach a peak in the first quarter of the year, had
\nsignificantly plunged due to war jitters.<\/p>\n
\"The looming war is devastating our exports as we have hardly
\nreceived any orders, especially from Europe, Africa, Asia minor
\nand the Middle East,\" said Lili on Friday.<\/p>\n
Lili forecast that if war broke out and did not quickly end,
\nthe country's textile exports would likely plunge by roughly 50
\npercent from last year's exports of US$7.2 billion. In 2001,
\nexports reached $7.6 billion.<\/p>\n
Lili explained that a 50 percent drop was possible as
\nIndonesia's textile transit hub for the European, African and
\nMiddle Eastern markets was located in Dubai, United Arab
\nEmirates, which, given its proximity to Iraq, would feel the
\nimpact of an attack on Iraq. It is located about 750 kilometers
\nfrom Iraq.<\/p>\n
Fifty-one percent of Indonesia's textile exports are sold to
\nthe European, African and Middle Eastern markets.<\/p>\n
Dubai has for decades been a major center for textile trading.<\/p>\n
Lili said that it would be difficult for textile traders to
\nrelocate their hub from Dubai as no other ports provided the same
\nfacilities, especially to accommodate textile traders bound for
\nthe European, African and Mideast markets.<\/p>\n
The country's export performance last year was better than
\nexpected, with the Central Statistics Bureau reporting last week
\nthat the value of exports rose by 1.21 percent to $57 billion
\nlast year. This year, the government targets export growth at 5
\npercent.<\/p>\n
Indonesian Footwear Association (Aprisindo) secretary-general
\nDjimanto shared Lili's concerns, saying the footwear industry was
\nalso receiving fewer orders due to the war jitters.<\/p>\n
\"If war breaks out, demands from Europe, Africa and the Middle
\nEast will probably dip as ships that carry shoes have to pass
\nthrough the risky Suez Canal to reach the markets,\" said
\nDjimanto.<\/p>\n
The Suez Canal could be considered a high-risk route for ships
\nif the U.S. launches a military strike on Iraq. The canal is
\nlocated around 650 kilometers from Iraq.<\/p>\n
Some 40 percent of Indonesia's footwear exports go to the U.S.
\nmarket and another 33 percent to Europe. The remainder goes to
\nAfrican, Middle Eastern and South American countries.<\/p>\n
Djimanto added that the global prices of shoes would surely
\nincrease significantly as buyers would have to pay extra shipping
\ncosts in the form of a war-risk surcharge.<\/p>\n
Despite businessmen's worries, the government says it has not
\nmade a contingency plan to help contain the impact of war on the
\ncountry's exports.<\/p>\n
Minister of Industry and Trade Rini MS Soewandi said on
\nThursday that the government had yet to make plans as war had not
\nyet broken out.<\/p>\n
\"We haven't set up any contingency plans, what for? War is not
\ndefinite,\" Rini said on Thursday.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/war-jitters-already-hurting-ri-export-businessmen-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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