Indonesia to boost countertrade

Sari P. Setiogi, The Jakarta Post, Jakarta

Indonesia will boost its countertrade to expand the country's export markets amid tighter global trade competition, Minister of Industry and Trade Rini MS Soewandi said on Monday.

"We face relatively slow global economic growth and tighter competition with other countries. Because of this, creativity and innovation in opening new markets will be necessary," the minister said in a speech read by the ministry's expert staff on trade and industry resources, Ridwan Kurnaen, during a seminar.

She said countertrade was on the increase globally, with over 130 countries now doing almost US$500 billion worth of global trade under countertrade schemes.

She said countertrade was effective in opening new export markets or introducing new export products.

Rini said the government annually set aside a portion of the budget to import equipment for the armed forces, police, the customs office and other state offices. These purchases, the minister said, could be made via countertrade.

While Rini did not provide any exact figures, Ridwan said the government expected between 30 percent and 50 percent of imports for its projects to be obtained through countertrade.

"We have signed memorandums of understanding with both Libya and Pakistan. We can also do such trade with other countries that lack foreign currency," he said.

Indonesia's total exports climbed 6.76 percent to US$61.02 billion in 2003, with non-oil and gas exports rising 5.18 percent to $47.38 billion.

The rise in non-oil and gas exports was helped by an 8.09 percent increase in animal and plant oil exports to $2.91 million, the trade ministry's director general of international trade, Sudar SA, said.

He noted that the significant rise in animal and plant oil exports was partly the result of the export of $57.2 million in crude palm oil to Russia as part of a countertrade deal that allowed Indonesia to acquire military equipment from Russia.