Import curb sought to ease account deficit
Import curb sought to ease account deficit
JAKARTA (JP): The government should take down-to-earth
measures to curb import growth and drive up exports to reduce the
growing current account deficit, executives suggested yesterday.
They said that without drastic measures it will be difficult
for the government to reduce import growth from 32 percent last
year to 11 percent this year and to achieve the projected 19.5
percent growth for exports.
Chairman of the Indonesian Importers Association, Amirudin
Saud, suggested that the government introduce new policy
instruments to curb imports, especially for consumer goods.
"So far the government allows everyone to import as many
consumer items, like fruits and vegetables, as they want. Now, it
needs to regulate this so that everybody, including foreign
restaurants, will use domestic products," Amirudin said.
In a press briefing on the 1996-1997 budget plan, Minister of
Finance Mar'ie Muhammad estimated that the current account
deficit would expand to US$7.9 billion for the current fiscal
year from $3.49 billion last fiscal year due to the higher growth
rate of imports than that of exports.
Indonesia's non-oil exports grew by 14.2 percent during the
January-September period of last year to $25.14 billion from
$22.02 billion in the same period of 1994. Meanwhile, imports
grew by 32.4 percent during the same period of last year with
imports of consumer goods rising by 70.9 percent.
Impossible
However, some analysts consider it impossible for the
government to slash import growth.
"I think it's almost impossible for the government to take
such a drastic cut in import growth given its expectation of more
than 7 percent in economic growth," the President of PT Daiwa
Indonesia Securities, Mitshou Kiyokawa, said.
In the same press briefing, Central Bank Governor J.
Soedradjad Djiwandono contended that the government would manage
to check growth of imports at 11 percent.
"Of course, we have to take a number of measures to reach the
target," Soedradjad said.
He noted that Indonesia has experienced a sharp fluctuation in
import growth. Imports grew by 21.3 percent in the 1999-1990
fiscal year. The import growth rate increased to 31 percent in
the 1990-1991 fiscal year but dropped drastically to 11.4 percent
in 1991-1992, then it fell further to 9.7 percent in the 1992-
1993 fiscal year and 6.6 percent in 1993-1994.
"Therefore, it will not be impossible to reach the target as
the growth rate of imports has not been steady," Soedradjad said.
Laksamana Sukardi, chairman of the Reform Consulting
Institute, suggested that the government "adjust" the exchange
rate or devalue its currency and reschedule large projects to
curb import growth.
"That would make the target growth for imports more realistic.
However, both measures have no direct effects on exports,"
Laksamana told The Jakarta Post yesterday.
To achieve more exports, he suggested that the government take
down-to-earth measures to abolish economic distortions created by
monopolies, oligopolies, cartel-like practices and collusion
between officials and businessmen.
"We have exhausted all the alternatives, but still we could
not strengthen our export competitiveness. We have no more
choices but dismantling those anti-market practices," he said.
Many expect better export performance with the recent merger
between the industry and trade ministries.
When proposing the 1996-1997 budget plan to the House of
Representatives on Thursday, President Soeharto underlined the
objective behind the merger of the two ministries.
"I have combined the industry ministry and the trade ministry
into one ministry. Hopefully with this measure our effort to
increase exports will have better direction and coordination,"
President Soeharto said.
Minister of Industry and Trade Tunky Ariwibowo told
journalists on Thursday that he will cut the "input costs" which
have burdened exporters.
"The government will soon issue a new deregulatory package
which will, among other things, cut in input costs," Tunky said.
(13/rid)