2001 exports record biggest fall in 12 years

Dadan Wijaksana, The Jakarta Post, Jakarta

Total exports fell by 9.8 percent to US$56.03 billion last year, the biggest percentage decline in 12 years, the Central Bureau of Statistics (BPS) said on Friday.

BPS chief Soedarti Surbakti said that the decline in both oil and gas, and non-oil and gas exports, was primarily due to the global economic slowdown.

"Percentage-wise, the 2001 exports decline is the biggest fall in the past 12 years, although in terms of value it is still higher than in 1997," she told a press conference.

But she added that the country still recorded a trade surplus of $15.24 billion last year due to slower imports which fell by 8.14 percent to $30.79 billion.

The decline in exports had been anticipated as the country's major export destinations including the U.S., Japan, and Singapore were headed toward recession.

Although exports had been the main contributor to the record economic growth of around 4.8 percent in 2000, the slower exports in 2001 did not cause a significant blow to the economy last year, which still grew impressively by 3.5 percent due to strong domestic consumption.

The government still expects this year's economic growth, projected at 4 percent, to be driven by domestic consumption as exports were likely to remain weak amid the global economic uncertainty.

Soedarti, however, said that Indonesia had managed to keep the U.S. and Japan as its main export destinations by improving its export performance in the closing months of 2001.

The total value of exports in December rose by 4.13 percent to $3.99 billion, compared to $3.83 billion in November.

Of the total, exports to the U.S. in 2001 reached $7.23 billion, or an increase of $74 million over 2000, followed by Japan with $6.62 billion.

Elsewhere, BPS also reported that inflation jumped by 1.99 percent in January, and 14.42 percent year-on-year, particularly due to higher fuel prices and electricity hikes.

The government raised fuel prices by an average of 22 percent in the middle of last month as a consequence of a cut in fuel subsidies to help ease pressure on the state budget. The government had earlier raised the electricity tariff.

Soedarti said that the fuel price hike, which would increase transportation and manufacturing costs, triggered higher prices of basic commodities, notably rice, which was up by 12 percent.

The higher fuel prices would continue to affect prices in February, she said.

She added that inflation would likely remain high in February because of the current floods, saying, "It will pose a potential threat to the sustainability of the goods and services distribution."

Torrential rains over the past week has caused debilitating floods in Jakarta which has hurt productivity in many sectors.

The government is targeting an inflation rate of between 9-10 percent.

High inflation could undermine the central bank's efforts to push interest rates lower.

Bank Indonesia has allowed its benchmark interest rate to decline for four consecutive weeks. It now stands at around 16.9 percent.

Businesses and the government have long urged the central bank to ease down the high interest rates.

Several analysts have predicted that inflation this year would likely be in the range of 12 percent to 13 percent following the fuel price hike.