Exporters fear increase in anti-U.S. sentiment may affect trade
Exporters fear increase in anti-U.S. sentiment may affect trade
Dadan Wijaksana, The Jakarta Post, Jakarta
The U.S. strikes launched against Afghanistan
will definitely cast a shadow over the country's export
performance, with fears of growing anti-U.S. sentiment looming
large, exporters said.
The hard-line Islamic Defenders Front (FDI) have threatened to
expel foreign citizens in Indonesia and called on all Muslims to
unite for a holy war against the U.S. and lay siege to its
embassy in Central Jakarta.
Indonesia has the world's largest Muslim population.
Indonesian Footwear Association (Aprisindo) fears that the
actions by certain radical groups toward Americans and their
allies will further hurt the country's export prospects.
"It's slowing down (exports) already. There were a few deals
that have been put on hold. Although they're relatively small
orders, we know it could easily spread to bigger ones," Djimanto,
the association secretary-general, told The Jakarta Post on
Monday.
He warned the government that massive lay-offs could occur if
it failed to take precautionary measures against increasing, and
potentially violent, protests against U.S.-based companies in the
country.
"If these so-called "sweepings" against foreigners are not put
to an end then it is very likely that those companies will shut
down their operations, at least on a temporary basis.
"But the effects of those (temporary closures) alone will be
too much for us to bear," he said.
He also brushed aside prospects of increased income gained
from a higher exchange rate, saying that strengthening of the
dollar against the rupiah would bring higher production costs as
the products also contain imported components.
The United States is traditionally the country's largest
footwear export destination. Last year, it consumed at least 40
percent of the country's total shoe exports, which were valued at
US$1.7 billion.
"Only one day after the strikes (against Afghanistan), our
local production might well have already been affected because
several of our exporters are considering closing their factories
temporarily, fearing that the situation will worsen," Indonesian
Electronics Association secretary-general Lee Kang Hyun told the
Post.
He did not name the companies he was referring to.
According to Lee, the country's electronics-based goods
exports last year totaled more than US$6 billion, 20 percent to
30 percent of which were sold in the United States market.
"And the obvious impact of the military action lays on the
movement of the rupiah as that will determine our competitiveness
in the global market," he said.
The rupiah closed at Rp 10,160 against the dollar on Monday,
reaching a three-month low and breaching the important level of
10,000 for the second time in two weeks.