Rini pushes countertrade deals to help exports

Rini pushes countertrade deals to help exports

Adianto P. Simamora
The Jakarta Post
Jakarta

The move by Minister of Industry and Trade Rini M. Soewandi to
push for countertrade deals with other nations should help
increase the country's exports amid the current global economic
slowdown, but one analyst warned that Rini had also to coordinate
with other ministers concerned to avoid problems at home.

"The countertrade program is OK to help boost exports in the
short term, but it can do damage at home if it is not well
coordinated with other ministers," economist at the Institute for
the Development of Economics and Finance (Indef) Bustanil Arifin
said on Friday.

He pointed out as an example that if Rini wanted to barter
Indonesia's export products with rice from a country, she had to
talk first with the minister of agriculture, as the deal could
add to pressure on the price of rice at home. That, in turn,
would affect farmers income, because imported rice under the
countertrade mechanism would likely be exempt from the 30 percent
import tariff.

Another example, he said, was that if Rini planned to trade
Indonesia's fertilizer products, she had to make sure that the
fertilizer supply for farmers at home was sufficient.

On her various trips overseas, Rini has been trying to promote
countertrade deals between Indonesia and neighboring countries in
the region as a way of helping to avoid a severe downturn in
exports, amid the economic recessions in the U.S. and Japan,
Indonesia's main export market.

Resolving the country's export woes is Rini's responsibility.
Indonesia's exports fell by 9.8 percent to US$56 billion in 2001,
from the previous year's level, and was the largest decline in 12
years.

Last month, the Central Bureau of Statistics (BPS) reported
that exports had dropped by 13.41 percent in March to $4.54
billion from the same period last year, due to the global
economic slowdown.

Rini has signed several memorandums of understanding (MoUs) to
boost countertrade deals, including with the governments of
India, Thailand, Vietnam, China and Cambodia. But the total
worth of the MoUs has not yet been made publicly available.

Under the countertrade deal with Cambodia, for example,
Indonesia will import around 100,000 tons of rice in return for
the export of a variety of agricultural equipment.

With India, the deal involves the planned construction of a
120-kilometer railway in South Sumatra by India Railway
Construction Company. In exchange, Indonesia will export coal
and crude palm oil products.

From Thailand, Indonesia will import some 200,000 tons of rice
while the neighbor has agreed to purchase the CN235 aircraft,
train cars, and fertilizer products, all worth around $40
million.