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View all search resultsRI seeks new suppliers, export markets as tensions mount: Trade minister
Trade Minister Budi Santoso sat down with The Jakarta Post’s Maudey Khalisha to discuss how the government is navigating challenges to maintain export performance due to the Iran war and rising protectionism.
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Trade Minister, Budi Santoso gestures while speaking during a special interview with The Jakarta Post on April 22 at the Ministry Of Trade office in Jakarta. (JP/Iqro Rinaldi)
I
ndonesia is grappling with mounting global trade pressures, from the US-Israel war on Iran to rising protectionism and tariff barriers amid a weakening multilateral trading system under the World Trade Organization (WTO).
Trade Minister Budi Santoso sat down with The Jakarta Post’s Maudey Khalisha to discuss how the government is navigating these challenges to maintain export performance. He also explained the efforts being made to address supply strains in industrial raw materials, such as naphtha.
Question: How has the Middle East geopolitical conflict affected Indonesia’s trade?
Answer: Indonesia exports US$9.87 billion to the Middle East, accounting for 3.49 percent of our total global exports. Our main export destination is the United Arab Emirates, which takes around 40 percent, followed by Saudi Arabia at 29 percent and the rest to several countries, including Iran at around 2.53 percent.
This is clearly a challenge. If we look at our exports in January and February, they declined by 13 percent. However, we still recorded a surplus of $641 million.
Our petrochemical needs, particularly naphtha [which is needed to make plastic packaging], also largely come from the Middle East. So, we are working with industry players to find alternative suppliers. We have identified Africa, India and the United States, with shipments expected to arrive by mid-May.
However, by the time they arrive, they will already be subject to new logistics costs. So, the situation is no longer the same as before the conflict. Logistics costs have increased, and not only for imports, but exports are also affected.
