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RI exports still grow by finding new markets

Indonesia's exports of non oil and gas commodities will be affected as the global economic downturn slashes demand, although exports could still grow by up to 8 percent this year as firms diversify export destinations

Mustaqim Adamrah, (The Jakarta Post)
Jakarta
Wed, January 7, 2009

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RI exports still grow by finding new markets

Indonesia's exports of non oil and gas commodities will be affected as the global economic downturn slashes demand, although exports could still grow by up to 8 percent this year as firms diversify export destinations.

Trade Minister Mari Elka Pangestu said Tuesday when delivering her ministry's assessment on export prospects for 2009 that non oil and gas exports would grow by between 4.3 percent and 8 percent.

Those figures are much lower than the annual average 18.3 percent export growth achieved between 2003 and 2007.

Even for 2008, when the global slowdown began to hit towards the end of the year, Mari said non-oil and gas exports were still estimated to grow by 18 percent for the year, well above the 14.5 percent target.

"The estimated growth of 2009's non-oil and gas exports uses a macro model and is based on assumptions about global trade growth, rupiah depreciation (against the US dollar) and (the volatility of) commodity prices," she told a conference.

Mari said the growth of non-oil and gas exports would much depend on the growth of world's economy.

The country's non oil and gas exports would grow by 4.3 percent, 6 percent, or 8 percent if global trade grew by 3.4 percent, 3.6 percent, or 4.4 percent, respectively.

Non-oil and gas exports contribute about 80 percent to the country's total exports.

Mari also said the projected growth had taken into account government policies in responding to the global economic downturn and their effectiveness.

"Of the projected 8 percent growth, 3 to 4 percent will be attributable to government policies in anticipating (the impact of) the crisis," she said referring to the government's Rp 50 trillion (US$4.85 billion) stimulus package.

"The growth would be lower than projected if these policies were excluded, or end up with failure."

Despite the fairly "small" growth projected in non-oil and gas exports this year, she said the country would still be able to book a surplus as imports would correspondingly follow the decline in exports.

"Our (2009) trade balance will remain in surplus, with the same amount, or lower than that we booked in 2008," said Mari.

In an effort to help realize the projected 2009 growth, she said the government would seek new export markets since Indonesia's main traditional export markets, including the United States, the European Union and Japan have all been severely affected by the crisis.

New markets would include South Africa, Kenya, Nigeria, Egypt and Middle Eastern countries, she said.

"Iraq and Iran have actually the potential to become our new markets."

She said the government would redirect the country's top 10 goods categories, sales of which had begun dropping significantly in main export markets, to the new markets.

The goods categories included furniture, textiles and garments, crude palm oil, construction materials, fisheries and shrimps and footwear.

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