Soeharto warns of export growth slowdown

JAKARTA (JP): President Soeharto warned yesterday about slowing export growth and the widening current account deficit.

The government began deregulating the economy 15 years ago which had increased exports slightly, Soeharto said when opening the Indonesian Chamber of Commerce and Industry's national convention.

"But we should realize that our increased exports are still less than those of other developing countries in Asia. This should be given close attention," he said.

Growth of the country's non-oil exports had slowed in recent years while imports had increased rapidly, he said.

Non-oil exports grew from US$27.1 billion in 1993 to $30.4 billion in 1994 and $34.9 billion in 1995. Non-oil imports rose from $26.2 billion in 1993, to $29.6 billion in 1994 and $37.7 billion in 1995.

"All of these things cause the current account deficit to rise," the President said.

The current account deficit increased from $2 billion in 1993 to $3.34 billion in 1994 and $6.9 billion in 1995.

Soeharto told the chamber not to worry about the rising current account deficit.

Instead of getting discouraged by the current account deficit in the face of trade liberalization, you should improve the situation, he told the chamber's businesspeople.

"The business society and the chamber should try hard to expand the market for our goods and services abroad. Our economic progress and development depend much on our ability to take advantage of the foreign market," he said.

The President called on businesspeople to make their products and services more competitive by improving efficiency and being innovative.

He said the country should continue to nurture small and medium enterprises to drive the economy and exports, and provide more employment.

"The government's efforts to develop small and medium enterprises will not be enough. It needs the participation of private business," he said.

Minister of Industry and Trade Tunky Ariwibowo told the convention the government would continue to make the bureaucracy more efficient, and business more efficient through deregulation.

For the bureaucracy, Tunky said, the government would continue to improve its transparency in policy making and implementation.

"The government will improve its services and be more proactive in developing business. And the business sector is expected to improve their own efficiency so that they can benefit from the opportunities that arise," Tunky said.

Minister of National Development Planning Ginandjar Kartasasmita said now was the most appropriate time for the chamber and business to strengthen their role in economic development.

"We are facing the new challenge of economic globalization which is marked by stiff competition," he said.

He said the future absence of government protection would force companies to compete against each other, including foreign firms. (rid)