D

espite a continuing slip in monthly exports, Indonesia’s export structure has improved as shown by a rise in shipments of more value-added products, a trade official says.

Exports from January to July had indicated a bigger proportion of finished products, which implied a shift from upstream products to downstream products, Deputy Trade Minister Bayu Krisnamurthi said on Tuesday in Jakarta.

Shares of garments to exports of textile and textile products rose to 60.95 percent in the January–July period from 59.65 percent a year earlier, while shares of yarn and fibers declined to 35.95 percent during the month from 37.78 percent in the past year, he said.

“Indeed, the increase is still very small, but this is a positive indication that our export structure has improved, composed of more value-added products,” Bayu said during a press conference at his office.

A similar trend can also be found in exports of electronics and automotive products, according to Bayu.

Shares of printing machines, which are manufactured locally, to total electronics exports, for example, increased to 15.2 percent in the designated period from 6.7 percent last year, while contributions of electronic components dropped to 37 percent from 40.65 percent on an annual basis.

Shares of four wheelers also climbed to 3.44 percent to total automotive exports from 0.88 percent, in contrast to contributions of automotive components, which shrank to 31.2 percent from 37.83 percent.

“These are preliminary changes, but they indicate that our export competitiveness is growing. Whenever there is pressure from price declines due to the global economic recovery, our capacity to export will be higher,” Bayu further said.

Indonesia’s monthly exports in August fell by 24.30 percent to US$14.12 billion from a year earlier, while imports dropped by 8.02 percent to $13.87 billion, resulting in a surplus of $248.5 million — the first trade surplus after deficits in four consecutive months starting from April.

From January to August, exports totaled $127.17 billion, down by 5.58 percent from a year earlier,
while imports amounted to $126.67 billion, up by 10.28 percent from last year.

Indonesian Institute of Sciences (LIPI) economist Latif Adam said that the government’s claim on the improved export structure was “too early”, as changes were made in “traditional” industrial sectors instead of processing natural commodities.

“These changes are still premature because they take place in the industrial sectors that have been well-developed in Indonesia,” he told The Jakarta Post.

Latif further said that the claim would be properly placed whenever shares of value-added products in the industry endorsed by government, particularly in the refinery of mineral commodities, increased and this would likely take a longer period. Apart from that, the improvement in export structure should be followed by significant shifts in export destinations, he said.

 The Institute for Development of Economic and Finance (Indef) economist Ahmad Erani Yustika voiced a similar concern, saying that progress should be oriented towards the processing of natural resources, which currently made up the largest bulk of exports.