Banks told to open offices overseas
JAKARTA (JP): President Soeharto yesterday urged Indonesian banks to open offices in other countries to promote the country's non-oil exports, whose growth is declining.
The President also expressed concern in a limited cabinet meeting on the economy here that a long dry season may affect crops in various parts of the country.
"State banks should lead other banks to open offices in other countries to facilitate transactions of Indonesia's non-oil exports," Soeharto was quoted as saying at the meeting by Minister of Information Harmoko.
Soeharto said commercial banks should also expand loans to industrial companies which export their products.
Indonesia's non-oil exports, which increased by 24.9 percent in 1991 and by 27.6 percent in 1992, rose by only 16.2 percent to US$27.07 billion last year. Non-oil exports declined in January and February of this year before bouncing back in March.
Harmoko said the country's non-oil exports increased by 8.9 percent to $2.41 billion in April over the same month last year.
"The country's total exports in April reached $3.13 billion, $815.5 million higher than imports in the same month," he said.
He said exports during the first four months of this year reached $11.63 billion, while imports were recorded at $9.29 billion, thereby resulting in a trade surplus of $2.33 billion.
Harmoko said the President also wanted businessmen to expand their overseas marketing networks to increase exports to non- traditional markets.
Textile manufacturers were asked to restructure their industrial plants to improve the quality of their products and to increase efficiency, the minister said.
Textiles have been the largest foreign exchange earner from exports among the country's non-oil products. Textile exports increased by two percent to $6.18 billion last year from 1992.
Drought
Harmoko said Soeharto warned that a long drought might affect agricultural crops this year because the dry season has already started in a number of provinces.
"As of July 5, paddy plants in 113,599 hectares of fields in Java, Aceh, North Sumatra, Bali and Southeast Sulawesi had gone dry, of which plants in 22,414 hectares were completely damaged," the minister said.
Drought has also affected 11,265 hectares of secondary crops, of which 1,484 hectares were completely damaged, he said.
He said the President suggested that banks extend loans to farmers whose crops are completely damaged to allow them to reschedule the payment of their debts.
The President also instructed that the authorities take technical steps to bring about rain near irrigation dams, and for agricultural institutions to introduce Kenyan paddy seeds, which can grow in dry fields, to farmers burdened by a long dry season.
Harmoko said the cabinet meeting also reported a 0.12 percent increase in the consumer price index throughout the country in June.
He explained that food prices in the country's 27 provincial capitals actually declined by an average of 0.03 percent in May, housing prices by 0.003 percent and service prices by 0.33 percent, but that prices of clothing rose by an average of 0.22 percent.
The increase in the consumer price index brought the country's inflation to 4.59 percent during the first six months of this year, he said.
He said the money supply expanded by one percent to Rp 38.93 trillion ($18 billion) as of May from Rp 38.54 trillion as of April.
The minister said the cabinet meeting for the first time discussed developments on tourist arrivals to reinvigorate the promotion of the tourism industry for foreign exchange earning.
The number of foreign tourists visiting Indonesia in the first five months of the year increased by 18.5 percent to 1.16 million, injecting $1.47 billion into the Indonesian economy. (riz)