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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Indonesia: Export target still Ďachievableí despite global slowdown

Monday, September 29, 2014 > 11:39:19
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(Jakarta Post)

The government remains optimistic that it will achieve its export target of US$190 billion this year despite lower than projected growth in global trade.

Deputy Trade Minister Bayu Krisnamurthi said in Jakarta on Friday that the export target remained achievable although the World Trade Organization (WTO) had lowered its projected global trade growth this year.

The WTO estimated that global trade would grow only by 3.1 percent, lower than its initial estimate of 4.7 percent, partly due to the spread of the Ebola virus in Africa, which has become a major threat to global trade.

“We have been looking into this condition and we’ll remain vigilant. The directorate general for national exports development (PEN) remains optimistic about the country achieving its export target,” Bayu said.

Bayu said that the Ebola outbreak in West Africa would not have a big impact on Indonesian exports to the continent because the country’s trade to the African region accounted for only a small percentage of its total exports.

“Africa only accounts for 3 or 4 percent of total exports,” he said.

Bayu said the global trade slowdown would have more of an impact on Indonesia’s trade in Asia — including China and India, which remains the country’s premier export market with 71 percent of the share, even though exports to China, Japan and South Korea grew only by an average 2.5 percent per year, Bayu said.“There are more opportunities in ASEAN,” he said, citing higher growth in the Philippines and Singapore, with 5 and 3.5 percent, respectively.

The deputy trade minister also listed other factors that contributed to the slowdown, such as the Ukrainian conflict that involved the EU, US and Russia. Conflict in the Middle East also had a negative impact on global trade.

With global trade slowing, the government is looking to push for other export markets, especially in North America and other European countries.

“North America and countries such as the UK promises growing import levels [from Indonesia], such as England’s 5.7 percent and Germany’s 6.5 percent,” Bayu iterated.

“There are also some prospective countries like Mexico, Taiwan and Iran that still provide positive growth opportunities for Indonesia. We must work hard to promote to these regions.”

Bayu said that the past 10 years had shown that second-half export results accounted for 107 to 108 percent of results in the first semester. “We remain optimistic that we’ll achieve exports in the area of $200 billion,” he said.

Previously, Trade Minister Muhammad Lutfi said Indonesia should be able to reach its export target of $190 billion this year, up by 4 percent from last year.

Indonesia’s total exports dropped by 2.46 percent to $88.83 billion in the first semester of this year, mainly due to the fall in mineral exports. Total exports in the first six months of this year were lower than the government’s target of $95 billion for the six-month period.

According to Central Statistics Agency (BPS) data, exports in the mining sector and others fell by 27.05 percent year-on-year in the first semester of 2014. The contribution of the mining sector to total exports over the first six months of 2014 decreased from 17.14 percent in the first semester of 2013 to 12.81 percent.

Mineral exports are expected to rebound in the first semester as major mining companies such as Freeport Indonesia and Newmont have been given permission to resume exports after they showed serious commitment to processing their ores in domestic smelting plants as required by the government.


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