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)