Govt to push exports for 15 products

Fitri Wulandari, The Jakarta Post, Jakarta

The government has selected 15 priority export products in a bid to help achieve this year's non-oil and gas export growth target of 7 percent.

Coordinating Minister for the Economy Dorodjatun Kuntjoro- Djakti said on Wednesday that the National Export Team also set action plans in order to boost the export of the selected products.

The 15 export priority products include furniture, processed wood, coffee, cocoa and cocoa products, rubber and rubber products, textiles and textile products, machinery and electronic equipment and footwear.

"If we want (our economy) to grow by 5 percent, the key is export. We have to penetrate the international market," Dorodjatun told reporters after a meeting with businessmen to discuss the export target.

The economy during the past couple of years had been growing at a meager rate of around 4 percent, which has been mainly driven by domestic consumption amid weak export and investment activities. The government projected the economy to grow by 4.8 percent this year.

The country's exports stood at US$61 billion last year.

"On average, export value reached $5 billion a month last year which is the same as the pre-crisis level," he added.

In order to boost the exports of the priority products, the government would intensify market penetration efforts and help improve the competitiveness of the products.

In the area of market penetration, activities include seeking new markets by signing trade deals with 22 countries; sending trade missions to 15 countries; and joining 40 trade exhibitions in 26 countries.

The government selected cocoa, textiles, edible fat and oil to be promoted in selected countries. Cocoa to South Africa and China, textiles to the United States, food products to Peru and Equador, fat and oil products to Turkey and China.

With regards to improving competitiveness, the government plans to improve the country's port service, ease taxes, and ensure the smooth supply of raw materials.

On taxes, the government plans to exempt raw materials such as cacao, coffee, fish, woods and cotton from value-added tax.

The government also plans to improve port management to help facilitate export and import activities.

Meanwhile, Sofyan Wanandi, the chairman of the Indonesian Employers Association (APINDO) said businessmen had yet to agree with the government on the export target set for the priority products.

He said the export target was deemed too high, considering that many companies were still facing various problems.

For example, the government set the target for cacao exports to increase by 25 percent this year. But, Sofyan said, businessmen considered a 15 percent increase more feasible.

Priority products

No. Products Increase Value 2003 Value 2004

(in US$ billion)

1. Furniture 8% 1.619 1.748

2. Processed wood 26% 3.16 3.981

3. Coffee 30% 0.51 0.663

4. Cacao & cacao products 25% 0.629 0.786

5. Rubber & rubber products 23% 1.883 2.315

6. Textile & textile products 5% 7.033 7.385

7. Machinery & electronics 4% 5.642 5.900

8. Steel, machinery, auto parts 7% 4.443 4.750

9. Pulp 11% 0.731 0.809

10. Paper 8% 1.939 2.094

11. Organic Chemicals 8% 1.213 1.314

12. Footwear 6% 1.216 1.290

13. Fish & Shrimp 8% 1.489 1.608

14. Fat & Oil 9% 2.46 2.68

15. Plastic materials 6% 1.072 1.133

Source: National Export Team