Exports increase to three-year high

Exports increase to three-year high

The Jakarta Post, Jakarta

Exports in June increased by 7.33 percent to US$5.28 billion, the
highest monthly export value in the past three years, the Central
Statistics Agency (BPS) reported on Friday.

The agency said that this should provide further evidence that
the country's export performance had started to recover after
dwindling last year due to the global economic slowdown and a
number of problems at home.

BPS said that exports in the first semester of this year also
increased by 10.53 percent to $30.35 billion in the same period
last year.

While the agency said in its report that the higher export was
mainly driven by oil exports (international prices of oil
declined during the period), BPS deputy chief Slamet Mukeno said
that there had been strong demand for Indonesian non-oil and gas
products from the U.S. and China.

The U.S. has been the country's traditional export market,
while China has also started to become the target of local
exporters. The U.S. authority reported earlier stronger-than-
expected economic growth in the second quarter, raising hopes
that recovery was on the way.

BPS said that non-oil and gas exports in June rose by 7.71
percent to $4.22 billion from the level in May, while first
semester figures grew by 7.30 percent to $23.41 billion.

Export value to the U.S. in June totaled $622.5 million. No
figure was given for the amount of exports to China.

Slamet said he was optimistic the country's full-year export
target of around $60 billion this year could be achieved even if
export growth would be flat in the coming months.

Indonesia has been struggling to boost exports after a poor
performance last year as the global economy had been suffering
from years of recession, while local exporters had to deal with
various local problems, including labor conflict, security
problems, inefficiency, and the lack of financing facility.

Increasing exports is crucial to achieve a stronger economic
growth needed to help absorb the huge unemployment problem
created by the late 1990s economic crisis.

Experts have said that in order to push exports higher, the
government must quickly eliminate the rampant illegal levies
collected by corrupt officials, resolve the labor problems, and
push banks to provide affordable loans to exporters so they could
invest in new machinery to help boost competitiveness against
exports from other countries like China, India, and even Vietnam.

Meanwhile, BPS also reported that imports in June declined by
15.24 percent to $2.43 billion from the level in the previous
month, while first semester imports were also down by 16.76
percent to $16.29 billion compared to the level in the same
period last year.

The statistics gave further evidence that the country has not
seen significant amounts of new investments both by foreign
investors and domestic investors.

Analysts have said that because of lingering uncertainties
investors have so far declined to make new investments despite
positive progress in the area of macroeconomy as reflected in the
stronger exchange rate of the rupiah, lower inflation, and
falling Bank Indonesia benchmark interest rate.

Indonesia's production system is heavily dependent on imported
raw materials.