T

he Indonesian Export Financing Agency (LPEI), also known as Indonesia Eximbank, has forged ties with Asian export import (exim) banks in an attempt to boost Indonesia’s sluggish exports.

It signed a memorandum of understanding (MoU) with nine members of the Asian Exim Banks Forum (AEBF) during the 22nd AEBF Annual Meeting on Wednesday.

The nine banks hailed from Australia, China, India, Japan, South Korea, Malaysia, the Philippines, Thailand and Turkey.

Vietnam is the only country that has yet to sign the MoU, but has expressed support and willingness to do so, Indonesia Eximbank CEO Ngalim Sawega said. The MoU will be an umbrella agreement for more bilateral cooperation between the countries.

At the same time, Indonesia Eximbank also inked bilateral agreements with five exim banks — from Japan, Thailand, China, the Philippines and Africa.

Africa’s exim bank, which consists of 42 African countries with Nigeria holding the largest stake, is an invitee at the annual meeting.

The cooperation will take the form of financing, including by bridging Indonesian businesses with financing firms in the partner countries.

For instance, Indonesia Eximbank could transfer sharia finance knowledge to Africa’s exim bank, while the latter could commit to taking over political risks for Indonesian businesses in African countries.

Ngalim said such an assurance would make Indonesia Eximbank more comfortable in financing businesses related to African countries. More detailed bilateral agreements with Egypt and Nigeria are currently in the pipeline.

He expressed hope that the cooperation could be implemented as soon as possible, adding that the signatories had agreed to form a task force for faster implementation.

“We have to think out of the box amid this gloomy global economy and trade situation. One way is to boost trade among Asian Exim Banks Forum member countries.”

The export value of the 11 member countries reached US$4.8 trillion, almost 30 percent of total global exports, in 2015, the International Monetary Fund’s (IMF) trade statistics showed.

Indonesia is struggling with sluggish exports and imports. Non-oil and gas exports fell 6.1 percent year-on-year (yoy) in the first nine months, while non-oil and gas imports dropped 4.1 percent yoy, according to the Central Statistics Agency (BPS).

When exports and imports deteriorate, the contribution of an exim bank is required and it cannot do business as usual, claimed Deputy Finance Minister Mardiasmo.

“The government has assigned the exim bank to provide financing, guarantees and insurance services for projects that are difficult to implement, but are important to support the country’s development,” he said.

The government, he added, provided support to exporters to open new markets and to export-oriented businesses, which are facing a slowdown due to the dim global economy.

Indonesia Eximbank aims to boost its export financing by 14 percent to 15 percent next year. In 2016, it hopes to disburse Rp 90 trillion (US$6.88 billion) of financing. Almost 95 percent of the figure has been channeled so far.