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)