Tue, 04 Feb 2003

Exports fare better than expected: BPS

Dadan Wijaksana, The Jakarta Post, Jakarta

The country's export performance turned out last year to be better than many had expected, thanks to stronger exports of agriculture and low-end manufacturing products.

The Central Statistics Agency (BPS) reported on Monday that the value of exports rose by 1.21 percent to US$57 billion last year, compared with the level in 2001.

"The increase in full-year (export) performance was mainly driven by a rise in non-oil and gas exports. The rise was good enough to offset a decline in oil and gas exports," BPS chief Soedarti Surbakti told a media conference.

Non-oil and gas exports increased by 2.8 percent to $44.9 billion during the year, from $43.7 billion in 2001. This came as exports in the oil and gas sector were down to $12.1 billion, from $12.7 the previous year.

Soedarti said the relatively better export performance during the year was helped by a better-than-expected showing of the Japan, U.S. and Singapore economies.

The three countries have long become the nation's main export destinations, absorbing around 38.6 percent of the country's total non-oil and gas exports.

Non-oil and gas exports to Japan, the U.S. and Singapore in December alone stood at $579 million, $497 million and $324.7 million respectively.

Analysts and industry players had previously painted a bleak picture for 2002 exports due to a host of problems, including the global economic slowdown and domestic uncertainties like lingering labor disputes and security problems, which prompted some foreign buyers to shift orders to other countries.

However, despite a stronger showing in 2002, the contribution to economic growth remains paltry. The 2002 trade surplus, known also as net exports, contributed less than 10 percent to the nation's economic growth.

Over the past few years, the country's economic growth has been driven mainly by domestic consumption. Economists have said that without a significant role from exports and investment, the country could not expect to sustain economic growth at 5 percent to 6 percent, necessary to generate sufficient employment and help reduce poverty.

This year, the government has targeted non-oil and gas exports to grow by 5 percent, thereby still relying on agriculture and low-end manufacturing products, which have proved to be relatively resilient against economic recessions in the developed economies. Meanwhile, the economy is projected to grow by around 4 percent, slightly higher than growth in 2002.

The above export figures should be a good start and confirm that there is still plenty of room for improvement in the country's export performance.

With consumer spending already showing signs of slowing down, plus investor reluctance to commit to the country, given the unfavorable business climate, turning to exports should be the most feasible option for the government to drive the economy.

Elsewhere, BPS said that imports in 2002 totaled $31.24 billion, 0.9 percent higher than the level in 2001.

This means the annual trade surplus increased by 1.5 percent to $25.75 billion, from $25.36 billion achieved in 2001.