Rini says exports to grow by 5 percent next year
Rini says exports to grow by 5 percent next year
Rendi A. Witular, The Jakarta Post, Jakarta
Minister of Trade and Industry Rini M. Soewandi said on Friday that Indonesia's export earnings are projected to grow by 5 percent next year on the back of better prices for the country's main export commodities.
She estimated that this year's export earnings would reach US$45 billion, a 3.5 percent rise from $43.6 billion in 2001.
"The 5 percent growth target should not be too hard to meet because demand is expected to rise in line with the recovery in the global economy," said Rini.
She said that the target was realistic despite the lingering security problems at home.
Rini said that the improvement in the global economy would help lift the prices of the country's major exports, such as textiles, electronics, footwear and timber-based products.
But the government's optimism is not shared by some exporters, who predict that exports next year will be slow due a to a host of problems here including labor disputes, security problems, rising production costs and difficulties with local autonomy.
These problems have discouraged foreign buyers who fear that Indonesia's exporters will not be able to deliver on time. Many foreign buyers have already started seeking alternative suppliers in other countries.
Indonesian Footwear Association (Aprisindo) chairman Anton Supit said that footwear exports would decline to below $1 billion next year from this year's estimate of $1.3 billion.
A similar view was also voiced by the chairman of the Indonesian Furniture Club, Yos S. Theosabrata, who said that furniture exports next year were expected to plunge to below $1 billion from $1.8 billion in 2001.
He said that the massive levies imposed by provincial governments were reducing the competitiveness of local furniture producers overseas, while the smuggling of cheap logs to China from Indonesia was also hurting the local furniture exporters.
The chairman of the Indonesian Wood Panel Association (Apkindo), Martias, also foresaw a weak export performance next year.
He said that plywood exports would remain flat in 2003 due to weak demand from Japan's property sector, which absorbs some 90 percent of the country's plywood exports.
Martias estimated that next year plywood exports would stay at around $2.2 billion, the same as this year's target.
Exports are an important engine of growth for the country's economy in addition to investment and domestic consumption.
But the performance of the first two growth motors has been declining over the past couple of years.
The Asian Development Bank said in a report this week that the economies of the Southeast Asian nations would grow slightly faster next year on the back of improving export performances.
Elsewhere, Rini signed an agreement on Friday with Minister of Forestry M. Prakosa to set up a special agency to ensure a supply of logs for the country's timber-related industries, while at the same time ensuring forest sustainability.
The agency, which was the brainchild of the Ministry of Trade and Industry, is intended to help boost the export of the country's timber and timber-related products, and resolve the problem of raw materials shortages.
Rini explained that without efforts to resolve the raw materials shortages, the timber products industry could soon suffer a serious downturn, which could leave some 4 million people jobless.
Annual export earnings from the industry declined to $4 billion from 2000 to 2002 from between $7 billion and $8 billion in 1999-2000.