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aking a contrary view to his deputy, Trade Minister Gita Wirjawan has said he is pessimistic about Indonesia’s exports being able to meet the government’s target of US$203 billion this year given the bleak outlook in global trade.

Gita estimated that with the slow recovery in the world economy, especially in Europe and the fall in commodity prices, Indonesia’s exports would likely fall by about 5 percent this year.

“I think we would be happy if the decline in exports is around 5 percent compared to last year’s figure,” the minister said in his speech during the Indonesia Investment Summit in Jakarta on Wednesday.

Such a gloomy forecast for Indonesia’s exports, Gita explained, was mainly caused by weakening global demand stemming from stalled economic recovery in the West.

Deputy Trade Minister Bayu Krisnamurthi said last week that the government was quite optimistic that the export target would be met, despite the uncertainties in the world economy.

 “We’re not exposed directly to Europe as much as other Asian countries,” said Gita, who is also former chairman of the Investment Coordinating Board (BKPM) that organized the investment summit. He said, however, that the economic slowdown suffered by Indonesian trade partners as a result of the European crisis caused a decline in orders for Indonesian commodities.

 During January to September, Indonesia’s total exports stood at $143 billion, falling six percent compared to last year’s figure, the Central Statistics Agency (BPS) reported this week.

With such figures, the agency’s director, Satwiko Darmesto, said that the country would not meet its exports target of $203 billion, predicting that monthly exports would likely average around $15 billion in the three months before year’s end.

Speaking to reporters on the sidelines of the summit, Gita acknowledged that Indonesia’s exports might only top $190 billion by the end of this year because of the lower commodity prices. “We know that 65 percent of our exports are commodities-related. So, if there is a decline in [commodity] prices, then our exports will fall as well.”

Despite the country’s under-performance in exports, Gita said Indonesia still booked a trade surplus of $1 billion as of September, resulting from improvements in the country’s import structure.

In the third quarter this year, Indonesia saw strong growth in imports of capital goods, up 20 percent compared to the same period last year, evincing the country’s strong investment climate. Imports of consumer goods, meanwhile, only increased by 0.6 percent.

“The reduction in consumer-goods imports is in line with our long-term goal and aspirations; and that is for Indonesia to move up the value chain,” said Gita, who forecast that Indonesia would post a $2.5 billion trade surplus this year.

In front of the foreign investors attending the Indonesia Investment Summit, the minister also took time to defend government policies that many international stakeholders regard as a form of protectionism, such as imposing taxes on certain mineral exports.

“Going forward, I think you will see more [such policies being implemented],” he said. “I don’t think that we can be construed as protectionist: it is more about the need for everybody to understand where Indonesia needs to be in the future.”

Gita’s statement on the need for Indonesia to climb up the value chain was echoed by his successor on the investment board, M. Chatib Basri, who also countered complaints by Indonesia’s trade partners labeling the country protectionist.

“If you look at the structure of the market itself, it is biased toward protectionism against finished products. This has been done by developed countries,” the BKPM chairman said during the press briefing held in the Indonesia Investment Summit.

“I’m not saying that this is a form of retaliation. But we have to see that the world’s economy itself is distorted — it is not free trade.” (sat)