Non-oil/gas exports to grow 7%

Non-oil/gas exports to grow 7%

Zakki P. Hakim, The Jakarta Post/Jakarta

The government expects non-oil and gas exports this year to
grow by 7 percent from US$47.41 billion last year and to further
expand by 10 percent in 2005, a senior official said on Thursday.

Exports, excluding the hydrocarbon sector, grew by 5.18
percent last year and 3.12 percent in 2002.

Minister of Industry and Trade Rini MS Soewandi said that she
was optimistic about future growth as the elections, which it was
initially feared would have an adverse impact on the economy, had
proceeded relatively peacefully. Furthermore, the global export
market was expanding.

"For example, the European Union took in an additional 10 new
members recently, thus expanding that market significantly," Rini
told reporters during a press luncheon.

She said the U.S. would focus more on its economy after the
November election, regardless of who won the contest, and this
afford opportunities for Indonesia to boost its exports to the
world's largest economy.

"However, we are closely monitoring the impact of the recent
U.S. interest rate hike on the competitiveness of our products in
the U.S. market," she said.

Aside from the U.S., the biggest markets for Indonesia's non-
oil and gas exports are Japan, Singapore, China and Malaysia.

The ministry hoped for a significant increase in exports of
agricultural and fishing products both this year and next year.
These commodities accounted for $2.54 billion in exports last
year.

It also hoped to see an increase in exports of textile and
apparel products, footwear, and electronics and components.

With regard to the textile and apparel industry, the Ministry
had met with Bank Indonesia on Wednesday and requested the
central bank to review its policy of discouraging private banks
from funding the textile and apparel products industry due to
high level of non-performing loans in the sector.

BI requires an industry to have a non-performing loan (NPL)
level of under 5 percent in order for it to be termed "healthy".
The textile industry, however, has an average NPL level of up to
10 percent.

"Eventually, BI said it understood that not all players in the
textile industry are indebted. Thus, it agreed to review the
policy and encourage private banks to examine the
creditworthiness of individual clients, instead of damning the
sector as a whole," she said.

According to Rini, industry associations and a number of banks
-- Bank Mandiri, Bank Danamon, Bank Negara Indonesia 46 and Bank
Rakyat Indonesia -- would meet next week to discuss the details.

Last year, full-term exports stood at US$61 billion as against
the $57.2 billion posted in 2002, a rise of 6.76 percent compared
to a year earlier. The rise was partly because of a pick up in
global demand and high international oil prices.

Oil and gas exports increased by 12.63 percent last year.