Minister Tunky optimistic about Indonesian exports

Minister Tunky optimistic about Indonesian exports

SAO PAULO, Brazil (JP): Minister of Industry and Trade Tunky
Ariwibowo said here yesterday that Indonesia's exports would
improve this year partly because of the facilities that the
government has given to exporters and investors.

"We should not be so pessimistic about the prospects of our
exports," Tunky told journalists.

According to the Ministry of Industry and Trade, Indonesia's
non-oil exports grew by 13 percent to US$18.07 billion in the
first semester of this year, up from $15.98 billion in the same
period last year. Meanwhile, non-oil imports grew in the same
period this year by 9 percent to $19.45 billion, up from $17.76
billion.

Tunky said the government would continue to drive exports
through deregulation, trade facilities and other support
measures, including faster reimbursements of value-added taxes on
input materials for exported goods.

"We will continue to undertake deregulatory measures and
monitor their implementation to improve our competitiveness,"
Tunky said.

He said the government would help exporters in their dealings
with overseas trading partners if they faced difficulties: in
terms of quotas and rules of origins for textiles and textile
products for instance.

The government, Tunky said, was doubling its effort to attract
foreign direct investment, especially in industries which
manufacture components, to reduce the imported contents of
Indonesia's exports.

Because of ongoing deregulation, Tunky said, the imported
contents of locally-manufactured footwear had decreased to below
50 percent, from 80 percent when the domestic footwear industry
was first developed.

"We will try to reduce the imported contents of our electronic
exports to gain more benefits not only from the assembly of
electronic goods, but also from the production of their parts,"
Tunky said.

During the first five months of this year, the exports of
Indonesia's 10 leading commodities, except wood-base products,
grew significantly over the same period last year. Exports of
electronic products increased by 6.8 percent, textiles and
textile products rose 8.2 percent, there was a 50.77 percent rise
for steel products and a 82 percent rise for jewelry. The export
of wood products, however, declined by 0.04 percent over the two
periods.

"Looking at this performance, we should be more optimistic
about our exports," Tunky said.

Evaluation

In Jakarta yesterday, Director General of International Trade
Anang Fuad Rivai said the government was willing to evaluate the
competitiveness of these 10 predominant commodities and boost
export growth of other non-oil and gas commodities.

In a hearing with the House of Representatives' Commission VI
on industry, mining, manpower and investment yesterday, Anang
said that in the last five years, Indonesia had had a trade
deficit in non-oil commodities.

He said non-oil exports grew by an average of 16 percent per
annum in the last five years, from $18 billion in 1991 to $34
billion last year.

In the same period, the import of non-oil and gas commodities
rose 11.6 percent per annum, from $23 billion in 1991 to $37.7
billion in 1995.

Anang said that to boost the growth of non-oil exports, the
Ministry of Industry and Trade would intensify trade diplomacy to
expand access to international markets.

At yesterday's hearing, Anang also said that the export growth
of several leading commodities like textiles had been slowing
down in the last few years because of tight competition on
international markets and low-added value.

"But such a trend should not necessarily mean that our textile
industry is going to become a sunset industry," Anang contended.

"Today the textile industry might have lost its competitive
edge with the emergence of other new giants like China, because
most of our products have very little added value," he said.

He said there was a need to improve competitiveness by
boosting investment in related upstream industries to raise added
value.

Anang said he was optimistic that textile exports would be
between $6.8 billion and $7 billion this year.

He said that Indonesia's upstream industries like the
petrochemical industry were improving.

"The growth of the upstream industries will help increase the
local contents and value of our products," he said. (rid/alo)