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.