Exports fell to US$7.15 billion in January, an 18 percent decline from the previous month and a 36 percent drop from the same period last year as overall demand faltered.

The 36 percent plunge is the steepest since 1986, according Bloomberg. The Central Statistics Agency (BPS) said Monday gas and oil exports dropped by almost 24 percent to around US$947 million from $1.25 billion in the previous month while non-oil exports also declined by 16.7 percent to $6.2 billion from $7.4 billion.  

In other words, national exports have been continuously declining for the last four months.

The country exported around $11 billion worth of goods in October last year, representing an 11 percent drop from the previous month.

The declining trend continued in the following month as exports slid further to $9.61 billion.  Things went from bad to worse as exports continued to plunge in December by around 10 percent to $8.7 billion.

Sri Adiningsih, an economist from the University of Gadjah Mada, said that policies instructing a preference for domestic goods during the global crisis played a major role in declining national exports.

"Demand for our products internationally has been declining because most countries are prioritizing their domestic goods during the crisis," she said. "The situation is also worsened by the decreasing value of our primary commodities such as gas, oil and crude palm oil."

The country has not yet realized how serious the impact of the global downturn could be, overshadowed instead by populist measures — not only by the government, but businesses as well — to safeguard social stability in the lead up to the general election.

The Indonesian Employers Association (Apindo) said in January that most businesses may wait until after the election before deciding whether to permanently dismiss employees.

According to Sri, the country should wake up and take notice of the real issue at hand, which is that if no proper measures are taken soon, Indonesia could face an even worse crisis than the one that occurred 10 years ago.

"People need to start understanding the severity [of plunging exports]. Last year's monthly exports were around $10 billion whereas this month they round $7 billion This situation will surely affect labor-intensive industries such as textiles and shoes," she said.

Sri also predicted that exports would continue to fall in the coming months, especially after April.

"The current goods being exported are from last year's orders. So many industries have received any orders since January. I fear that by April exports will have declined to extremely low levels.

"We need to realize that we can no longer depend on exports for our economy and instead need to focus on the domestic market. The government needs to launch the stimulus package as soon as possible."

The House of Representatives recently approved the launch of the government's Rp 73.3 trillion ($6 billion) stimulus package to boost the national economy.

On Monday, the government announced a waive in import duties paid by businesses hit by the global crisis worth Rp 1.7 trillion.

The battered exports slowed down Indonesia's economic growth in the fourth quarter of 2008 to 5.2, the slowest pace in more than two years. (hdt)

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