Indonesia's textile exports to reach $7.45b this year

JAKARTA (JP): The Indonesian Textile Association has predicted that exports of the country's textile and textile products will rise about 2 percent to US$7.45 billion this year from $7.3 billion last year.

The association's secretary general, Irwandy Muslim, said over the weekend that the economic crisis at home had encouraged textile producers to seek more offshore markets for their products.

Indonesia's textile exports had reached 130 countries this year, compared to 85 countries in 1990, he said.

Irwandy said the improving performance of textile exports proved that the industry was not a "sunset" industry as some experts tended to label it.

"You see the textile industry is one of those in Indonesia which has managed to survive the economic turmoil," Irwandy said.

Irwandy even predicted that Indonesia's textile exports could reach between $10 billion to $12 billion after the turn of the century.

Exports of textile and textile products made a showing again in 1996 after slumping in the early to mid-1990s. Exports of these products surged from $5.7 billion in 1994 to $6 billion in 1995 and $6.5 billion in 1996.

The most important markets for textiles are Europe, with an annual textile trade of $50 billion, and the United States with $47.7 billion.

"In addition, there are also potential markets such as Thailand, Korea, Turkey and others," Irwandy said.

Despite its handsome export performance, textile firms, like any other export firms in the country, face hindrances in exporting their products, especially from the ailing banking system.

The collapse of the Indonesian banking sector had caused locally-issued letters of credit to be rejected by foreign banks. As a result, textile firms could not get their raw materials on time.

The government's tight money policy with high interest rates has limited the capability of textile firms to make new investments and to support exports.

Some other problems, Irwandy said, were the poor development of the chemical industry, less productive human resources and a choking exit tax on people traveling abroad.

Irwandy again called on the government to ease all those problems for the textile industry as it had become one of the country's foreign exchange earners.

Besides, the textile and textile-related industry employs about 3.5 million workers and provides a living to another 2.5 million people, such as those working as textile vendors at traditional markets. (29)