Thu, 29 May 2003

Government to boost countertrade programs

Adianto P. Simamora, The Jakarta Post, Jakarta

The Ministry of Industry and Trade plans to seek more countertrade deals in nontraditional export markets, in a bid to increase export revenue and counter the economic slowdown in developed nations.

Minister Rini MS Soewandi said the move was essential because exports to traditional markets like the U.S., Japan and Europe were expected to decline.

The government has targeted a 5 percent increase in non-oil and gas exports this year to US$47 billion, from $45 billion last year.

"I admit that it will be hard to meet the 5 percent growth target this year given the global economic uncertainties. That is why we need to boost the countertrade deals with non-traditional markets to reach that target," Rini said during a meeting with House of Representatives Commission V for industry and trade.

Rini said she was now in talks with her counterparts from three countries -- Pakistan, India and Poland -- about the possibility of setting up countertrade programs.

"We are now in intensive talks and we hope to soon sign the (countertrade) deals," she said.

Indonesia and Russia signed a $192 million countertrade deal in April, under which Indonesia will receive Sukhoi Su-27 and Su- 30 jet fighters and Mi-35 helicopters from Russia.

Russia in turn will receive some 30 agricultural commodities and manufacturing products of equal value from Indonesia. The commodities include textiles, coffee, rubber, chocolate, black pepper, electrical appliances and fishery products.

Aside from the countertrade deals, the ministry also plans to boost promotional activities in nontraditional markets such as the Middle East, East European countries, Africa, Latin America and East Asia to help raise export earnings.

"In October, for example, we will hold an expo in the United Arab Emirates," Rini said.

Indonesia's major non-oil and gas exports are textiles, footwear, timber-based products and electronics.

Indonesia's non-oil and gas exports during the first quarter of this year increased by 9.4 percent to $11.17 billion, from $10.17 billion in the same period of 2001.

Currently, the country's exports to nontraditional markets account for about 8 percent of total exports.