The government's export growth target of 5 percent in the proposed 2010 state budget is "too moderate", the Indonesian Chamber of Commerce and Industry (Kadin) says.
The outlook reflects uncertainty on how efforts to improve competitiveness through investment climate reforms will unfold amidst the prolonged impacts of the global economic downturn, Kadin chairman Mohammad S. Hidayat told The Jakarta Post recently.
"All of the government's macroeconomic assumptions, including on export growth, should have been higher," Hidayat said.
Room for higher export growth is available, provided the government was willing to make "bold moves" to help cut production costs, he said.
"The government is being too prudent, as it always has been in taking all aspects into account."
Hidayat said the government must be able to implement all plans left idle in streamlining the bureaucracy and improving infrastructure.
Trade Minister Mari Elka Pangestu said the 5 percent export growth forecast was realistic as the global economic downturn was entering a recovery phase.
"Given this year's contraction, it will be good enough *for our exports to grow* positively next year."
Mari also planned to request part of a 2010 stimulus package for trade financing.
Meanwhile, Hidayat has said Indonesia needs at least US$1 billion to prevent exports from falling further.
Indonesia has so far secured $500 million for trade financing from Japan in a bilateral agreement, and may benefit from $250 billion pooled for trade financing commitments made by members at the G20 summit in London, the United Kingdom, in April.
Exports were expected to contract in volume by 15 percent this year from a year earlier, revising an earlier estimate of a contraction of between 20 and 30 percent, Mari said.
By contrast, in 2008, as commodity prices soared, the country's total exports increased by almost 20 percent from the previous year to $136.76 billion, according to data from the Central Statistics Agency (BPS).
Exports accounted for around 20 percent of Indonesia's economy last year, the BPS data shows.
The BPS announced on Monday that the country's total exports stood at just over $50 billion in the first half of this year, a 29 percent drop from the $70 billion booked over the same period last year.
It also said non-oil and gas exports fell by 21 percent to around $43 billion in the first semester of this year, from $54 billion in the same semester last year.
Exports have declined in earlier months due to the global economic downturn, which curbed global demand, but BPS head Rusman Heriawan said these would improve later in the year although positive growth was unlikely this year.
