Ginsi expects 15 percent drop in imports this year

JAKARTA (JP): The Importers Association of Indonesia (Ginsi) estimated yesterday Indonesian imports would drop up to 15 percent to about US$36.4 billion this year from $42.92 billion last year.

Association chairman Amiruddin Saud said the estimated drop would be partly due to the rupiah's sharp fall against the U.S. dollar.

He said the drop in imports, 70 percent of which comprise raw materials, would not affect industrial activities in the short- term because the existing stocks would last for six months.

According to data from the Central Bureau of Statistics, Indonesian imports, including oil and gas imports, reached $42.9 billion in 1996, up from $40.6 billion in 1995.

Indonesia's exports, including oil and gas exports, increased to $49.8 billion in 1996, from $45 billion in 1995.

Speaking at a hearing with the House of Representatives' budgetary commission, Amiruddin said imports declined by about 70 percent last month to $750 million as most importers took a wait and see approach following the rupiah upheaval.

The rupiah has dropped by nearly 30 percent since January, falling significantly in the last two months following the drop in other Southeast Asian currencies.

Bank Indonesia (central bank) has almost tripled the interest rates of its promissory notes up to 30 percent to drain rupiah liquidity. But the rupiah continued falling despite the surge in interest rates.

Amiruddin said the association fully supported the current tight monetary policy exercised by the government because it would select good and strong importers from those who only relied on governmental protection and credits from banks.

The situation would further help push down inflation rates, he said.

"Therefore, we call on the government to continue the current tight monetary policy," he said.

Amiruddin also called on the government to slow down the import of consumer goods, especially fruits and imports of raw materials which can be manufactured in Indonesia, like automotive and ship components.

BPS data says raw materials accounted for 70.67 percent of total imports in 1996 (down from 72.82 percent in 1995), consumer goods 7.17 percent (5.79 percent in 1995) and capital goods 22.16 percent (22.16 percent in 1995).

Indonesia's imports of fruit increased to $101.5 million in 1996 compared with $86 million in 1995. (jsk)