JAKARTA. Minister of Finance Sri Mulyani Indrawati said that the developing countries may be alternative markets for Indonesia’s exports, amid the slow global economic recovery.
“The export opportunity to developing countries may reflect on the inter-emerging countries’ transactions, which has been continuously increasing. We have to think of exporting to non-traditional market,” she said during Indonesia Eximbank Investor Gathering, Tuesday (7/2).
Minister of Finance said, the export destinations in ASEAN countries are still promising. Myanmar and Vietnam, for the examples, have succeeded to book significant economic growth. Therefore, Sri Mulyani expects that the moment of export performance improvement during the quarter I-2017 can be maintained.
Deputy of International Cooperation Coordination Affairs at Coordinating Minister of Economic Affairs Rizal Affandi said that he has received instruction to conduct assessments about export diversifications to non-traditional market countries, such as Iran, Nigeria, some Southern Africa countries, and Morocco.
Commodities prices dropped
According to the BPS, Indonesia’s exports as of 2016 have dropped by 3.95% to US$ 144.43 billion compared with 2015. However, the decrease in exports in 2016 was much lower compared with 2015, while the exports dropped by 14.62% (yoy).
Former Minister of Finance Chatib Basri said, export will be the mainstay of Indonesia’s economic growth in 2017, on the grounds that the investments are unlikely to grow since the credit growth has not yet met the expectations.
According to Chatib, ASEAN countries may provide great markets for Indonesia’s exports. Let alone, the export costs to ASEAN countries are lower than the logistic delivery costs to some regions in Indonesia.
In 2016, ASEAN market comprised 21.88% of the market shares of Indonesia’s exports, followed by the US, China, and Japan with 11.94%, 11.49%, and 10.06%, respectively. Indonesia’s exports to ASEAN grew by 5.34% (yoy), or the second highest after the export growth to China that reach 13.85%. During the same period, the exports to the US and Japan grew by 2.46% and 0.89%, respectively.
Chief Economist at Samuel Aset Manajemen Lana Soelistianingsih said that the exports in this year would be overshadowed with the decrease in commodities prices. For an example, the coal price may drop, as China is likely to consume its domestic coal reserves. Lana added, the coal price is quite worrying, except the crude oil price may hit US$ 60 per barrel.
The price of crude palm oil (CPO) is potentially to drop. The decrease in China’s domestic consumption is potentially to reduce the price of CPO. (Muhammad Farid/Translator)
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