Industrial exports expected to gain momentum in 1995

JAKARTA (JP): Minister of Industry Tunky Ariwibowo expressed optimism yesterday that Indonesia's industrial exports would gain more momentum next year, given the economic recovery of major importing countries.

Tunky said here that the economic recovery in many importing nations, particularly Japan and the United States, will further push up the demand for Indonesia's industrial exports, which suffered slower growth in the first eight months of this year.

"The performance of Indonesia and its industrial exports to Asian countries is also expected to strengthen in line with their growing economic activities," the minister told newsmen in a year-end press briefing.

Exports to the United States, Japan and other Asian countries account for around 70 percent of Indonesia's total exports.

Indonesia's industrial exports rose a mere 8.11 percent to US$16.35 billion in the January-August period from $15.12 billion in the same period of last year, the minister said.

He said, however, that the 8.11 percent growth was still lower than that recorded in the corresponding period in the previous year due to the drop in export earnings from plywood and textile products.

Plywood exports, the largest export earner among the non-oil sectors, dropped by 0.80 percent to $3.78 billion in the January- August period, while those of textile products fell by 9.40 percent to $3.74 billion.

The minister attributed the drops in the prime exports to the fall in their prices.

"The economic recession in some industrialized nations caused a significant drop in the demand for plywood and textile products," he said.

Economic analysts estimated that the growth of this year's industrial exports will reach less than 15 percent, much lower than government's annual growth projection of 17.5 percent, due primarily to a drop in the plywood and textile exports.

Indonesia's total exports in the first eight months of this year increased by only 5.82 percent to $25.57 billion from $24.11 billion in the same period of last year.

Growth

Tunky said that the improvement in the business climate resulting from the simplification of investment procedures would further stimulate industrial activities next year.

The minister estimated that the growth of the metal, machinery and electronic industries would reach 15.83 percent, the chemical industry 7.9 percent, the multifarious industries 8.26 percent, the agriculture-based processing industries 8.20 percent and small industries five percent.

"The government is committed to further deregulating bureaucratic lines to stimulate new businesses," the minister told newsmen of his office's program to stimulate industrial activities.

Other programs, the minister said, will include aligning the business visions of both industrialists and government officials through the introduction of more intensive training programs on human resource development, the improvement of management systems in the industrial sector and the introduction of new patterns of industrial development strategies.(hen)