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Government Raises 2007 Export Target to 20%

Sunday March 04, 2007

Hours after publishing the Trade Department press release that Indonesia targets an increase of 14.5% in exports for 2007, Trade Minister Mari Pangestu revised this target to 20% in line with directives just received from Vice President Jusuf Kalla, who came to the Trade Department for a coordinating meeting, reported Kompas daily.

The meeting was also attended by Coordinating for the Economy, Boediono, Industry Minister, Fahmi Idris, National Planning Minister, Paskah Suzetta, Information Minister Sofjan Jalil and Chamber of Commerce Chairman, Hidayat.

The President had expressed the wish that export targets reach 20% growth this year, or slightly up from the 17.55% achieved in 2006 including oil and gas, or 19.68% excluding oil and gas. This is despite the fact that the Trade Department envisaged a target of 14.5% only, taking into consideration the fact that a number of Indonesia’s exports such as palm oil, coffee, shrimps, footwear and furniture still face negative campaigns overseas in meeting required technical, health and the environmental standards. Domestically, the infrastructure and transportation problems still hamper the smooth flow of goods for exports and imports, that all add to costs.

Declining investments in 2006 were also expected to negatively impact on export capacity this year.

Nonetheless, based on last year’s achievements, improved world economic conditions, and the decline in primary commodities prices, the 20% increase should be achievable, through improved services and promotion, solving problems faced by each sector. Jusuf Kalla also promised to form a cross-sectoral working team to also involve the private sector, the banking sector. Focus will be on 10 best commodities to be equipped with their specific strategies. These are : textile and textile products, electronic goods, footwear and shoes, vehicle spare parts, palm oil, rubber and products, furniture, shrimps, cocoa and coffee. These ten commodities contributed 44.8% of the total receipts of US$ 79.5 billion for non oil and gas exports.

Other important commodities are coal, copper, nickel, tin, paper and pulp, plywood, and alcohol, whose share together came to 26.3% of total export value.  Whereas, exports will be given priority to the 15 top destination countries, with access to these , as well as to potential markets improved.

On the Industry side, Industry Minister, Fahmi Idris is confident that a 20% growth is very achievable, as a number of Indonesia’s commodities are already competitive, but still need financial and non-financial support.