Exports tipped to reach $65b this year

Leony Aurora, The Jakarta Post, Jakarta

Following months of steady growth, Indonesia's exports would hit a record US$65 billion worth this year, up 6.5 percent from last year, due to soaring oil prices and increasing export volumes, a government official says.

Central Statistics Agency (BPS) deputy head Rusman Heriawan said on Wednesday that revenue from exports in October amounted to slightly more than $7 billion, making the total value of exports in the first 10 months of this year near $58 billion.

"Exports this year should reach $65 billion," he said after a hearing with the House of Representatives' Commission XI on financial affairs.

Oil and gas' sales soared along the high oil prices. The bigger volumes of non-oil products being exported also boosted performance this year, he said.

Indonesia's exports rose 6.8 percent last year to $61 billion from $57 billion in 2002. Non-oil and gas products, such as electrical goods and rubber, contributed three-quarters of this figure.

Monthly exports first surpassed the $5 billion mark -- the peak level of Indonesian monthly exports during past years -- in March this year. The country's overseas sales in September jumped 41 percent to $7.15 billion from a year earlier, with oil and gas increasing 26 percent and non-oil rising 46 percent.

Rusman said that exports would continue to climb next year. "It's safe to target a 6 percent export increase in 2005," he said.

Rusman predicted that in 2005, oil prices would not be as high as this year. "Aside from oil, secondary products (non-oil and gas products) will play a big role (in boosting exports)," he said.

Indonesia needs robust exports to help accelerate economic growth to more than 6 percent annually -- an amount which would absorb the nation's high unemployment.

The economy has grown by about 4 percent per annum during the past few years, mainly driven by domestic consumption because of lagging export and investment markets.

Analysts have said the country's exports were weak due to the high costs of doing business caused by corruption and red tape.

The government has predicted the country's economy would grow at 4.8 percent this year and 5.6 percent the next. The agency said that in the first semester of 2004, Indonesia's economy grew by 4.66 percent.