Non-oil and gas exports may match 1998 levels
JAKARTA (JP): The government predicts that Indonesia's non-oil and gas exports this year can reach at least the same level as last year despite sluggish performance in the first semester.
The chairman of the National Agency for Export Development (NAFED), Gusmardi Bustami, said on Friday the exports would match the US$48.8 billion booked last year if an expected increase in orders in the upcoming months is realized.
"We are optimistic that foreign orders of certain products, especially textile and textile products, will be booming in four months, before the end of the year," he said.
Foreign orders for textile and textile products and shoe products normally peak in the latter part of the year, Gusmardi said.
"Buyers from the United States and European countries usually increase their orders from Indonesia to cope with the surge in demand for clothes in winter."
Gusmardi said the increasing productivity of the industrial sector, from 41 percent last year to the current 58 percent, also was expected to help boost exports in the coming months although it was not a certainty.
Data released by the Central Bureau of Statistics (BPS) show that the export value of non-oil and gas commodities from January to June fell 12.63 percent, reaching $17.92 billion from $20.51 billion in the same period last year.
BPS said the value of non-oil and gas exports in June was $3.01 billion, down 10.70 percent from the level in May.
Total exports, including oil and gas exports in the first semester of this year dropped 11.81 percent to $24.57 billion from $21.69 billion in the same period in 1998.
BPS attributed the decline to inconsistency in government export policies, a weak real sector and the economic condition of Japan, the country's primary export market.
But Gusmardi attributed the drop partly to tighter competition with other exporting countries that produce similar products, the low quality of many Indonesian products and weakening demand in some markets.
He acknowledged that the government should embark on serious measures to keep Indonesian non-oil and gas exports on track this year, especially to its biggest buyers.
"Exports to our 24 main buyers dropped in this year's first semester." He added that exports to Japan and South Korea, the country's first and third biggest buyers, fell 20 percent during the period.
Total export value decreased 8.6 percent to $48.85 billion in 1998 from $53.44 billion in 1997.
The country's non-oil and gas exports in 1998 alone reached $40.98 billion, a 2 percent decline from $41.82 billion booked in 1997.
Gusmardi said the government would continue to simplify export procedures, provide incentives for exporters and promote Indonesian products to overseas markets.
He added that exporters were being encouraged to find new markets other than the 24 regular buyers of Indonesian goods.
The government is targeting textile and textile product exports to reach $9 billion this year, he said, from $7.3 billion last year, while shoe exports were expected to increase 25 percent to US$1.5 billion this year from $1.2 billion booked in 1998.
Gusmardi also disclosed that NAFED recently signed a cooperation agreement with the Japan International Cooperation Agency (JICA) to conduct a study on the promotion of six categories of the country's industrial exports, namely textiles and textile products, food and beverages, wood and wood products, electronics and electronic parts, automotive parts and machinery parts. (gis)