Prepare for free trade: Soeharto

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)