Prepare for free trade: Soeharto
JAKARTA (JP): President Soeharto instructed all related government institutions yesterday to improve the coordination of efforts to increase Indonesia's competitiveness on the world market.
"Anticipating the introduction of the ASEAN Free Trade Area arrangement and trade liberalization among the APEC members, the President instructed related ministers to improve coordination to increase the competitiveness of our products on export markets," Minister of Information Harmoko said after a monthly limited cabinet meeting on the economy at the Bina Graha presidential office.
The Association of Southeast Asian Nations (ASEAN) has been gradually liberalizing trade among its six members by lowering import duties to a maximum of five percent and reducing non- tariff barriers by the year 2003.
Meanwhile, the Asia Pacific Economic Cooperation (APEC) has agreed to liberalize trade among its 18 members, including ASEAN countries, by the year 2010 for its developed member economies and by 2020 for its developing members.
Harmoko said that efforts should concentrate on the promotion of highly competitive products, such as textiles, wood products, rubber, leather goods, crude palm oil, pulp and paper, food products, electronics, copper, and tin.
The minister said that Indonesia recorded export revenues of US$3.77 billion in May, of which $2.83 billion was contributed by exports of non-oil products and $935 million by oil and gas. Its imports reached $3.37 billion.
"The country, therefore, enjoyed a trade surplus of $400.7 million in May," he said.
During the January to May period of this year, Indonesia's exports reached $17.36 billion, comprising $4.4 billion from oil and gas exports and $12.95 billion from non-oil exports.
Because imports reached only $15.41 billion, the country gained a trade surplus of $1.94 billion in the January to May period.
The January to May trade surplus was 33 percent lower than the $2.89 billion recorded in the same period in 1994.
Harmoko also announced that the country's inflation rate, which fell steadily from 1.69 percent in April to 0.49 percent in May and then to 0.16 percent in June, surged back to 0.71 percent in July.
Last month's high inflation rate was caused mainly by a 1.08 percent increase in the average price of food in the country's 27 provinces. Housing costs increased by an average of 0.48 percent, clothing prices by 0.58 percent, and the prices of miscellaneous products and services by 0.61 percent.
In comparison, food prices fell by an average of 0.43 percent in June, while prices in the housing sector increased by 0.12 percent, clothing prices by 0.14 percent and the prices of miscellaneous goods and services by 0.94 percent.
The rise in the consumer price index in July brought the cumulative inflation rate during the first seven months of this year to 6.09 percent, higher than the government's target of five percent.
Harmoko said the country's money supply as of June reached Rp 47.33 trillion ($20.9 billion), as compared to Rp 45.22 trillion in May.(riz)