Jakarta aims to revive economy with new measures to boost exports
Indonesia's new administration is seeking to roll out a set of measures to boost its exports in a bid to revive economic growth amid pressure from the ongoing trade war between the US and China.
The country's trade activities have been dwindling amid slower economic growth in China - its top export destination - that resulted from its prolonged trade war with the world's biggest economy.
Still, South-east Asia's largest economy has managed to expand around 5 per cent in the past few years against the backdrop of an unfavourable global environment, thanks largely to its relatively resilient household consumption, which makes up more than half of its gross domestic product.
The government wants to boost its exports to help the economy to grow by between 5.4 per cent and 6 per cent in the next five years, newly appointed Trade Minister Agus Suparmanto said yesterday.
The move will also be expected to narrow the country's trade deficit, he added.
"To keep the trade balance in check, our strategy is to raise non-oil-and-gas exports," he told journalists in a press briefing.
From January to September, Indonesia's non-oil-and-gas outbound shipments, which make up the largest chunk of exports, declined by 6.22 per cent to US$114.75 billion (S$156 billion) on a yearly basis, whereas its inbound shipments, excluding oil and gas, slipped by 5.54 per cent to US$110.25 billion, according to Statistics Indonesia.
Overall exports settled at US$124.17 billion, down 8 per cent from last year, while its total imports were valued at US$126.12 billion, down 9.12 per cent from a year earlier, resulting in a US$1.95 billion deficit.
The ministry also aims to enlarge non-oil and gas exports by 6.88 per cent to 12.23 per cent annually from next year until 2024 to drive total exports to rise by 4.5 per cent to 8.63 per cent, said Mr Agus, a businessman who runs a shipyard company in the province of Bangka Belitung Islands.
Indonesia still sees room to improve its outbound shipments to its two key markets - China and India, its fourth-largest export destination - particularly with commodities such as bird's nests to China and palm oil to India.
"We see the market access to China is wide open and we are identifying our domestic products to be exported. Basically, they want goods with good quality that can meet their standards," Mr Agus said.
He added that greater palm oil exports to India will likely be achieved following New Delhi's recent move to lower its duties on the commodity.
The trade ministry will also encourage the export of products such as food and beverages, textile and textile products, vehicles, pharmaceutical products, fisheries produce, wood and furniture.
The ministry expects total exports to reach at least US$190 billion next year, up from US$175 billion targeted this year.
A trade mission will be sent to the US, Indonesia's second-biggest export destination after China, this month to discuss the extension of tariff cuts for Indonesian goods under the US generalised system of preference scheme, said Deputy Trade Minister Jerry Sambuaga.
The facility, which Indonesia has enjoyed since 1980, is under review.
During his visit to Indonesia on Wednesday, US Commerce Secretary Wilbur Ross expressed his hope to resolve the issue soon.
To obtain wider market access globally, Indonesia will soon ratify 13 newly concluded agreements, such as the Indonesia-Australia comprehensive economic partnership agreement (Cepa), while also speeding up negotiations on 11 deals, including Cepas with the European Union and Turkey.
