Fri, 13 Aug 2010

Jakarta (ANTARA News) - Industry Minister MS Hidayat hoped Indonesia`s exports could be increased to reduce any trade deficit.

"China indeed is now the preference for increasing exports of commodities. They now import more than exporting. But we hope ahead of 2011 we can increase the exports," he said after a coordination meeting here on Thursday.

He said the opportunity for increasing exports of agricultural products is wide and the possibility for Indonesia to increase exports to China is also big because there is still a trade deficit.

"Some of our exports to China are indeed down but perhaps in 2011 we can increase them. We now still suffer a deficit of US$2 billion although totally our trade balance is still good," he said.

Coordinating Minister for Economic Affairs Hatta Radjasa meanwhile said there was indeed a decline in exports but it was hoped it would be only temporary in view of fluctuations in imports of especially capital goods "as seen from the import value added tax which is up, and growth in the industrial sector up to four percent."

"This means our manufacturing is growing. Indeed it is not yet reaching seven percent. It is more than two percent and now reaching four percent. So it is growing. We will run after it," he said.

He said the government in its efforts to increase exports would continue to conduct infrastructure improvement to reduce cost and increase competitiveness.

"With regard to exports it is clear the first thing to do is improving infrastructure, reduce cost, improve transportation that causes high cost economy. And then improve competitiveness," he said.

Then, it is hoped small industries will grow to produce import substitutes and develop the downstream of the upstream industries that have now become a prime sector.

"We import many electronic components. We are starting developing supplier industries besides developing the downstream of our upstream industries which have been strong such as palm oil. We must not only export palm oil but must also develop its downstream industry," he said.

The Central Bureau of Statistics (BPS) recorded Indonesia`s exports in June 2010 reached US$12.29 million down 2.87 percent compared to exports in May.

"The drop is due to a decline in oil/gas exports," BPS chief Rusman Heriawan said.
Compared to June`s exports last year, exports in June 2010 rose 31.04 percent.

Meanwhile non-oil/gas exports in June 2010 still rose by 1.02 percent compared to exports in May 2010.