Rini urges exporters to expand market

Rini urges exporters to expand market

Tantri Yuliandini, The Jakarta Post, Jakarta

Minister of Industry and Trade Rini Soewandi urged Indonesian
exporters to help limit the impact of the global economic
recession by exploring markets outside the United States.

"The recession has already been felt in our major export
destinations such as the U.S., Japan, Europe, and Singapore, so
we need to explore other markets to avoid a downturn in our
exports," Rini was quoted by Antara as saying.

She said that Indonesia's non-oil and gas exports, as of the
third quarter of the year, had dropped about 20 percent compared
to the same period last year.

"But the decline could be sustained at between nine to 10
percent at the end of the year if we could shift to other
markets," she said, adding that Indonesian exporters should be
more aggressive in marketing their products in China, India, the
Middle East, and in African countries.

Rini's statement came after the U.S. National Bureau of
Economic Research made the first formal announcement Monday that
the U.S. economy was already in recession, with other countries
likely to follow suit.

Center for Strategic and International Studies economist Pande
Radja Silalahi downplayed Rini's suggestion to diversify markets.
Although not dismissing them completely he said that in practice
it was not so simple.

"This is business, not a football game where a player could
kick the ball wherever he pleases. It takes years to open up new
markets," Pande told The Jakarta Post.

He urged exporters to not altogether abandon the U.S. only
because of a recession, but rather to scrutinize more on what the
country needed and to be more active in marketing in those areas.

Other economists earlier said that a recession in the U.S. may
mean a slowdown in its consumption of high-end goods, but demand
for low-end products -- goods that Indonesia largely provides --
would instead thrive as its population looked for cheaper
alternatives.

"We need to maintain our existing market while at the same
time probe for other potential markets," Pande said.

Furthermore, secretary-general of the Indonesian Textile
Association (API) Indra Ibrahim said the industry would not
survive without its American market.

He said that exports to the U.S. comprised 26.3 percent of all
Indonesian exports, with the second-largest market, the United
Kingdom, accounting for 6.4 percent. Exports to Japan comprised
5.9 percent and to the United Arab Emirates 4.3 percent of total
exports.

"Do you see the vast gap? If there was any interference in
exports to the U.S. it would spell trouble to the whole textile
and clothing industries," he told the Post.

Indra said that although the government's suggestion might
work for other commodities, changing markets from the U.S. would
prove to be too difficult.

"It would mean distributing to more than 200 countries, to be
able to replace the 26.3 percent the U.S. holds," he said, adding
that it would not be achievable in a short time.

Indra predicted that if the recession in the U.S. expanded to
other countries, exports would decline by at least 25 percent
next year, compared to US$2.2 billion in 2000.

To at least lower that number, the government must intensively
promote Indonesia and Indonesian products, he said, adding that
trade diplomacy between the nations should be aggressively
carried out.

"It will not be easy," he said.

API had earlier predicted that more than 100,000 workers in
the textile industry would loss their jobs next year due, in
particular, to the shrinking U.S. market.

Exports have been the main engine of Indonesia's surprising
4.8 percent economic growth last year. With the expected decline
in exports this year, some analysts doubt whether the
government's 4 percent economic growth projection for next year
could be met.