1995/96 exports likely to fall short of target

1995/96 exports likely to fall short of target

JAKARTA (JP): Indonesia's exports in the current fiscal year
will probably fall short of its target, while imports will exceed
the government's estimate substantially, Director General of
International Trade Anang Fuad Rivai said yesterday.

"The country's exports in 1995/1996 will probably reach only
US$46.9 billion, slightly less than the $47.6 billion targeted by
the government," Anang told the Budgetary Commission of the House
of Representatives (DPR) in a hearing here.

Meanwhile, the country's imports may reach $41.8 billion, far
more than the $37.8 billion estimated by the government in its
budget plan.

Last fiscal year, the country's imports were recorded at
$34.12 billion and exports at $42.16 billion.

Anang said that the slow growth of exports will be caused
mainly by a drop in exports of some products, suchg as palmoil,
gold and silver jewelry, precious stones, food and beverages.

Anang, quoting a written report of the Indonesian Textile
Association (API), said that the growth of textile exports, which
increased by only 2.5 percent to $5.8 billion in 1994/1995 from
$5.55 billion in 1993/1994, continued slowing down this year.

During the first semester (April-September) of 1995/1996,
textile exports increased only by 2.3 percent to $3.1 billion
from $3.03 billion in the same period of 1994/1995.

The association's secretary-general, Benny Soetrisno, said in
the report that the use of old technology in most of Indonesia's
textile manufacturing companies has affected the competitiveness
of the country's textile products on the world market.

About 60 percent of machines used by textile manufacturers are
from the 1970s. "This causes inefficiency," he said.

Furthermore, high interest rates, import tariffs, levies and
sophisticated bureaucratic procedures have also caused higher
costs in the textile industry.

The annual interest rates of about 21 percent charged by
Indonesian banks are far higher than the 13.3 percent in
Thailand, 11 percent in the Philippines, 7.95 percent in Malaysia
and 6.44 percent in Singapore.

Anang said at yesterday's hearing that the sharp increase of
imports is resulted from a surge in imports of consumer goods as
a steady increase in imports of raw materials.

Imports of consumer goods in the first semester of 1995/1996,
for example, increased by 96.17 percent to $1.7 billion from
$860.8 million in the same period of 1994/1995. This import surge
caused the share of consumer goods to increase to 6 percent of
the country's total imports in the first semester from only 4.05
percent in the corresponding period of last fiscal year.

Anang said imports of raw materials and auxiliary goods
increased by 33.9 percent to $20.1 billion in the first semester
from $15 billion in the same period of 1994/1995. (kod)