Posted on 17 Apr 2015
Despite declining non-oil and gas
exports in the first quarter, the government is still confident it can reach
its target of more than 28 percent growth in overseas shipments this year.
Non-oil exports slid by 8.23 percent to US$33.43 billion from January to March
on weak overseas sales of palm oil and coal, triggering concerns the country
would not be able to grow its exports by 28 percent to $192.9 billion in 2015.
Data show that Indonesia’s exports to nine major trading partners, including
China, Australia, Singapore, Japan and the US, have dropped significantly.
Exports to China and Australia, for instance, plunged by 36.51 percent to $3.13
billion and by 46.06 percent to $547.3 million, respectively.
Trade Minister Rachmat Gobel downplayed the concerns, saying the government was
optimistic the full-year goal could be achieved.
“We will continuously make efforts to expand to less-developed markets, such as
Africa, and to increase exports to ASEAN,” he said in a press briefing on
Thursday.
However, Gobel said no specific incentives were being prepared aside from
efforts to tackle major bottlenecks, including poor infrastructure and high
logistics costs.
President Joko “Jokowi” Widodo on Monday held a dialogue with exporters to
discuss obstacles hampering overseas shipments in an apparent acknowledgment
that the overall trade surplus of $2.43 billion in the January-March period was
mostly due to slowing imports rather than rising exports.
Against the weakening trend, shipments to some countries, such as Taiwan,
Vietnam, Saudi Arabia and Switzerland, climbed considerably. Exports to Taiwan
rose by 13.2 percent to $124 million, while sales to Switzerland surged by
3,131 percent to $485.4 billion.
In terms of products, jewelry and iron and steel led the export expansion,
surging by 51.75 percent to $1.98 billion and by 41.22 percent to $281.4
million, respectively.
Indonesian Institute of Sciences (LIPI) economist Latif Adam said it would be a
tough for the government to meet its target this year as prices of primary
commodities, largely made up of exports, continued to slump, as did demand from
key trade destinations, particularly in China.
In the first quarter, China’s economy slowed to its lowest level in six years,
which may weaken its demand for palm oil and coal to feed its manufacturing
activities.
“The quickest solution for exports is to focus on manufactured goods [...] such
as textiles, footwear, electronics and automotive products,” he said.
In its latest trade outlook, the World Trade Organization (WTO) warned
countries about the bleak outlook for global trade growth in 2015.
The expansion of global merchandise trade is expected to increase slightly to
3.3 percent this year from 2.8 percent in 2014, far below the annual average of
5.1 percent recorded since 1990.
Bank Danamon economists Anton Hendranata and Dian Ayu Yustina, however, said
exports of manufactured goods could pick up in coming months as positive growth
in some products — such as coal, palm oil, machineries and electrical
appliances, jewelry and wood products — had occurred in March.
“If supported by the implementation of tax incentives for exporting companies,
exports could gradually rebound in coming months so that hopefully they will be
able to counter potentially rising imports,” they wrote in a note.
