Exports set for a decline: Associations

JAKARTA (JP): Indonesian exports will likely weaken even further in the aftermath of Tuesday's attack on the United States, Indonesia's biggest export market, dropping between 10 percent to 20 percent this year, exporters said.

Head of the Indonesian Electronics Producers Association (Gabel) Lee Kang Hyun said on Friday that the attack on the United States would cause electronic exports to be even more sluggish than they had already been.

"This year we've had enough trouble with the global economic slowdown, but the effect of this attack could be very vast. Export orders are likely to drop or, worse still, we could even get cancellations," he told The Jakarta Post.

Lee said that he would have to wait at least a month to calculate just how much damage the attacks would cost local electronics exporters, but that he expected total exports to the United States to drop between 20 percent to 30 percent this year.

Electronics exports brought approximately US$6 billion to the country last year, of which about $2 billion was from the United States, he said.

Lee said that the association had expected exports to reach a total of $8 billion this year, but "after seeing what happened, I am sure that this figure could not be reached."

Indonesia's 2001 export target is set at $65 billion, compared to $62 billion reached last.

Head of the Indonesian Textile Association (API) Lili Asjudiredja told the Post that he expected exports to drop between 10 percent to 20 percent this year from a total of $8.2 billion in 2000.

He said that the biggest worry for textile exporters at the moment was the possibility of delays in the shipment of goods to the United States, a country that absorbs 26 percent of Indonesia's textile exports.

"So far this month we have only covered 60 percent of our United States exports and we're worried about a delay in shipment," Lili said.

There would be a disruption in the imports of raw materials for textiles such as cotton from the United States, because the documents for the trade had been destroyed along with the World Trade Center (WTC) in New York where they were kept, he said.

Anton J. Supit, chairman of the Indonesian Footwear Association (Aprisindo), said that he had not been able to calculate the possible losses incurred to Indonesian footwear exports by Tuesday's attack, refuting reports that the association could lose $150 million in export potential.

Anton said that the losses would depend on how the United States fared after the attacks and on how far the impact of the attacks would affect the world's largest economy.

He said that a decrease in footwear exports was imminent but that it would only be temporary. This year Anton expected a drop of about 10 percent in exports, compared to $1.7 billion in 2000.

Indonesia exports about 30 percent of its footwear to the United States.

Secretary-general of the Indonesian Cacao Exporters Association (Askindo), Zulhefi Sikumbang, said that he was not overly concerned about exports to the U.S. despite the fact that Tuesday's incident had also hit New York's cacao terminal market.

"The terminal market, obliterated along with the WTC, determined the price for cacao in the U.S. So now there is no market there, but we will shift to the London cacao terminal market," he said.

The U.S. absorbs about 60 percent of the 120,000 tons of cacao Indonesia exports annually.(tnt/11)