Non-oil exports fall for the first time

JAKARTA (JP): For the first time in ten years Indonesia's non- oil exports have declined, raising concerns in a cabinet meeting on economy at the Bina Graha presidential office here yesterday.

"President Soeharto ordered related ministers to study the causes of the decline in non-oil exports in January and learn why the changes in demand were taking place." Minister of Information Harmoko made this announcement after a limited cabinet meeting on economy.

Harmoko said that Indonesia's export of non-oil products fell by 11.7 percent to US$1.89 billion in January from $2.14 billion in the same month of 1993, while export of oil and gas declined by 10.9 percent to $763 million from $856.31 million.

Indonesia, however, enjoyed a trade surplus of $597.2 million in January despite of the export decline, he said.

The January imports fell by 3.9 percent to $2.05 billion from $2.14 billion in the same month last year.

The country's exports have already fallen by 4.9 percent to $3.19 billion last December from a year before due to a sharp decline in oil prices on the world market.

"The government will soon take concrete measures to boost the country's non-oil exports," Harmoko said.

The government, realizing that oil prices had fallen steadily since the early 1980s, has taken several steps. This has included the rupiah devaluations in 1983 and 1986 and the reduction of barriers for imports of raw materials to promote non-oil exports.

Harmoko said the President, who is also chairman of the Non- Aligned Movement (NAM), instructed Minister of Trade Satrio Budiardjo Joedono to appoint a team to coordinate trade cooperation among developing countries, which may also help increase Indonesia's exports.

Inflation

Harmoko said that the cabinet meeting also dealt with inflation, which fell to 0.7 percent last month from 1.76 percent in February and 1.25 percent in January.

"The inflation of 3.71 percent in the first three months of this year is far lower than 6.44 percent in the same period of last year," he said.

According to the government, the high inflation rate in the first quarter of last year was caused by increases in fuel prices, electricity billing rates and transportation fares, while the high rate in the January-March period was caused mainly by floods and increasing demand for goods prior to last month's Idul Fitri holiday.

The government, under its State Policy Guidelines, is committed to keeping the rate of inflation to a maximum of five percent per annum.

The information minister said that last month's inflation was caused by increases of food prices in the capitals of the country's 27 provinces by an average of 1.6 percent. Clothing prices also rose by 1.41 percent. The prices of housing increased by only 0.07 percent and other goods and services by 0.04 percent.

Even though food prices rose by an average of 1.6 percent, the prices of rice fell by an average of 2.44 percent to Rp 609.29 (28.4 U.S. cents) per kilo last month from Rp 624.58 in February due to the start of the harvest season in the country, he said.

He said the money supply increased by 8.9 percent to Rp 40.35 trillion as of January from Rp 37.03 trillion as of last December.

Harmoko said the meeting also discussed the damages of rice and secondary crops caused by floods in Java, Sumatra, Sulawesi and West Nusa Tenggara.

"The President wants a delay for the repayment of credits by farmers whose crops have been damaged by floods," he said.(riz)