TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Eximbank to boost lending for exporters
Finance Minister Sri Mulyani Indrawati has urged the Indonesian Export Financing Agency (LPEI) to provide financing for more exporters in a bid to boost exports, amid the country’s widening current account deficit
Change Size
F
inance Minister Sri Mulyani Indrawati has urged the Indonesian Export Financing Agency (LPEI) to provide financing for more exporters in a bid to boost exports, amid the country’s widening current account deficit.
The LPEI, also known as Indonesia Eximbank, has the authority to finance exports for prospective and strategic industries.
Sri Mulyani called on the LPEI to seek out more customers, whether among small and medium enterprises (SMEs) or larger corporations.
“Currently, the LPEI only serves around 1,200 customers, which is tiny. I want 1 million or more,” she said during a public seminar on Monday.
The potential for providing more financing to exporters is extensive, because Indonesia can produce many products such as tea, chocolate or coffee, that can be sold overseas, she said.
Besides the traditional export markets, Sri Mulyani also cited many new export destinations that exporters can explore such as Central and South Asia.
Boosting exports is seen as a solution that can help strengthen Indonesia’s economic fundamentals amid challenges from current external sectors, such as the United States Federal Reserve’s interest rate hike, the escalating trade war between the US and China, and rising global oil prices all of which has put pressure on the rupiah.
Indonesia’s current account deficit amounted to US$8.03 billion, 3 percent of the GDP in the second quarter of 2018, a worrying figure compared to the first quarter of $5.7 billion, 2.2 percent of GDP.
The current account deficit is projected to reach about $25 billion by the end of this year.
As a quick, temporary solution, the government has decided to hike import taxes for 1,147 consumer goods that are perceived as non-essential or have domestic equivalents.
However, Sri Mulyani asserted that the policy was only a short-term solution, as the most important thing would be to boost exports, rather than controlling imports.
Responding to this, Sinthya Roesly, LPEI executive director, said the agency was determined to provide more financing for exporters and help them to export to non-traditional export destinations.
“We are trying to find new potential export destinations. This year, we are supporting exporters to export to Africa,” she told The Jakarta Post on the sidelines of the seminar in Jakarta.
To date, the LPEI has disbursed financing totaling Rp 108.7 trillion ($7.3 billion), and it aims to disburse up to Rp 112 trillion by the end of 2018. About 85 percent of its customers are corporate clients, while the rest are small and medium enterprises.
On Monday, the LPEI announced collaboration with the University Network for Indonesian Export Development (UNIED), in creating reports that analyze and provide recommendations for the government to create better policies regarding future exports.
Danang Parikesit, a professor from UNIED, said that in order to boost national exports, the government needed to prioritize exports when preparing the 2019-2024 national mid-term development plan (RPJMN).
It is also crucial to create a joint monitoring committee for exports, he added.
Furthermore, a government regulation (PP) is required concerning basic policies for national export financing (KD-PEN), that covers potential commodities to be exported, and better export infrastructure management policies.
