Export credit facilities to be improved

Export credit facilities to be improved

JAKARTA (JP): Newly appointed Minister of Industry and Trade
Luhut Panjaitan said on Tuesday he was seeking to increase export
credit facilities to boost the country's export earnings.

"Our exports are like a locomotive that can move the economic
recovery," Luhut told reporters after meeting members of the
Indonesian Textile Association (API).

According to the Central Bureau of Statistics, non-oil and gas
exports in the first quarter rose 29.62 percent to US$10.75
billion from $8.29 billion a year earlier.

Luhut said he planned to meet the governor of Bank Indonesia
to discuss the possibility of channeling more export credit
facilities to selected export-oriented industries.

"We should channel the funds step by step yet continuously,"
he said. He declined, however, to name how much he hoped to raise
in export credits, and under what scheme it should be channeled.

Last year, the government established Bank Expor Indonesia
(BEI) with a paid-up capital of Rp 3 trillion (US$375 million) to
help finance the import of raw materials for export-oriented
companies.

Despite skepticism from the business community, the bank
expected to gradually raise its export credit financing to $70
million per month.

Luhut said the government would prioritize the country's
dominant non-oil and gas commodities, including textile, woods,
furniture and plantation commodities for the export credit
facilities.

"We shall pick only bona fide export-oriented companies for
the credit facility," he said.

He estimated the textile industry would earn some $12 billion
in export sales this year, up from $ 7 billion last year, on the
back of export credit facilities.

These sales are still a small fraction of world textile sales,
which reached $350 billion in 1999.

According to API, the country's textile industry ranked 12th
with $7.8 billion in export sales in 1998, compared with top
performers China and Hong Kong, which respectively booked $34.7
billion and $31.5 billion in the same year.

API earlier estimated this year's export sales to reach only
$8 billion and to between $12 billion and $20 billion in 2012.

Luhut also said he would seek to help eradicate the
inefficiencies that have made the textile industry uncompetitive.

He said the textile industry was only competitive in its
production.

"As soon as the products get out of the factory, there'll be
numerous taxes and charges for the transportation," he said.
(bkm)