Ministry urged to boost exports

Ministry urged to boost exports

JAKARTA (JP): President Soeharto yesterday urged industry and trade officials to help boost exports and curb imports, without introducing limitations.

"The Ministry of Industry and Trade needs to strengthen its role of coordinating institutions that involve exports. One important thing is to promote our goods rapidly," Soeharto told the officials, who made a courtesy call on the President after completing a five-day consolidation meeting.

The meeting was made following the merger between the trade and industry ministries.

The President said non-oil exports must be increased because of steadily growing imports.

"What is equally important is to control imports. But this is not to be done through bannings or limitations but through policies which are well-planned, integrated and clear," he continued.

Supporting Soeharto's statement on the urgent need to limit imports, Minister of Industry and Trade Tunky Ariwibowo noted that it should be pursued carefully.

"Efforts to limit imports should be made in line with the rules set by the World Trade Organization (WTO)," he told journalists after the meeting. "We cannot just ban imports. There are ways that are not against the WTO's rules."

One of the ways to curb imports, Soeharto said, is to accelerate the development of upstream industries, supporting domestic industry.

Soeharto expressed concern over the sharp growth of imports and the slowing down of export growth, which he said was caused by rising competition in the world market, not weakening demand.

Indonesia's total exports grew by 13.4 percent to US$45.42 billion last year from $40.05 billion in 1994, while imports soared by 27 percent to $40.66 billion from $30.98 billion. Consequently, last year's trade surplus fell by 41 percent to $4.75 billion from $8.07 billion in 1994.

The declining trade surplus has caused the widening of the country's current account deficit, which is projected to reach $7.9 billion this fiscal year, ending this month, as compared to $3.49 billion last fiscal year.

Globalization

The President said Indonesia needs to become more open and prepared to cope competitively with economic globalization.

With such a global market, on the one hand, there are ample opportunities for Indonesia to tap foreign markets. On the other hand, Indonesia could become a dumping ground for products from other countries.

"That's why we have to be competitive both in foreign and local markets," Soeharto said.

He vowed that the government will continue deregulation measures and cut red tape to improve the competitiveness and efficiency of the country's economy.

"We have to take all necessary efforts so that Indonesian business people can expand their businesses here and foreign business people feel that doing business here is cheaper than doing business elsewhere," he said.

He noted that deregulation is required to scrap unnecessary bureaucratic obstacles and stimulate innovation and creativity in doing business.

"To boost our export growth, we have to scrap all unnecessary obstacles and drop all levies which have no connection with production," Soeharto said.

The President also said that Indonesia needs to diversify its export markets, simplify export distributions and widen its international trading network. "If necessary, work together with private domestic companies or international companies."

The task is especially urgent for state-owned trading companies, he continued.

Tunky told journalists after the ceremony that the government is considering the possibility of merging state-owned trading companies as they will be charged with special tasks.

"We'll study them all. And after that we'll decide whether to merge them or set up a holding company for them," Tunky said.

Before being merged into the ministry of industry and trade, the ministry of trade used to have several trading companies, including PT Pantja Niaga, PT Kerta Niaga, PT Aduma Niaga, PT Dharma Niaga, PT Mega Eltra, PT Sucofindo and PT Sarinah Department Store.

Tunky said that there are too many such companies.

"The companies' activities are focused more on imports of various goods. But in the future they will be asked to promote exports," explained Tunky.

Soeharto told the industry and trade officials to help maintain strong growth in industry and trade.

He also urged them to make use of domestic consultants' services in the fields of technology, management and marketing, which so far still rely too much on foreign personnel.

"Strong consultancy services, supported by qualified research and product testing institutions, will strengthen industry and trade for the future," Soeharto said. (13/rid)