Rupiah depreciation chance to boost exports

Indonesias rupiah currency has continued to depreciate against the US dollar where since early this year until the middle of August it has dropped from about Rp12,580 to Rp13,800 per US dollar.

The weakening of the countrys currency has caused prices of imported goods to soar. However, the government hopes that Indonesian exporters will take advantage of the rupiah depreciation to increase exports.

For this purpose, the government will send trade missions abroad, provide export financing facilities and hold exposition to promote exports.

President Joko Widodo (Jokowi) recently urged the countrys exporters to explore new markets by taking advantage of the rupiahs current depreciation against the US dollar.

"We usually only look at traditional markets such as the United States, Europe, China, Japan, and Korea while, in fact, there are other countries that we can enter," he noted in his speech at the launch of Threefold Export Increase Movement at Pelindo IV Makassar Container Terminal on Monday (August 3).

President Jokowi emphasized that opportunities still exist in several countries in Latin America, Africa, and the Middle East, among others for exporting the countrys commodities.

"Starting next week, trade missions will be sent to countries that we have never explored before," he affirmed.

While sending trade missions to promote Indonesian products abroad, the government will also provide an export financing facility for exporters who want to expand exports to non-traditional markets.

This policy is focused on expanding exports to non-traditional markets such as Africa, South America, Central Asia and South Asia.

"Africa will be put on top priority because the continent is a large market. So far, we have won only 3.5 percent of the African market potential," Director General for National Export Development of the Ministry of Trade Nus Nuzulia Ishak said.

The government will provide exporters with a export financing facility with certain criteria.

The measure is aimed at expanding exports to non-traditional markets because the performance of Indonesias exports to traditional markets is already established.

"We no longer need to provide export financing facilities for exports to traditional markets because they have been running well. So, we aim the target at non-traditional markets," remarked Nuzulia.

Besides Africa, market expansion efforts will also be aimed at South America. Indonesias non oil export share to this region still only accounts for about 2.51 percent.

Its export values to South Ameria in 2014 stood at US$3.7 billion only while those to Africa totaled US$5.1 billion.

"The markets in South America like Mexico and Peru have begun improving. Apart from that, the South and Central Asian markets also become our target. Indonesias non-oil and non-gas exports to these markets account for 11.02 percent worth US$16 billion," Nuzulia added.

The criteria for obtaining export financing facilities included the ability to increase competitiveness and added values of products that will support the growth of domestic industry.

It will also be provided for the exportation of Indonesias mainstay commodities such as plam oil, textile and its products, timber, pulp, furniture, electronics, automotives and others.

Other strategic products, such as aircraft and its components, weaponry products, ship and its components, railway products and products in the construction field are also included in the criteria for obtaining the export financing facility.

The government is also preparing a budget amounting to Rp2 trillion which will be managed by the Indonesian Export Financing Institution (LPEI) for the implementation of the export financing program in 2016.

Besides promoting export products through trade missions overseas, the government through the Ministry of Trade will also organize an international exhibition at home to boost exports.

The Ministry of Trade is committed to maximize national export promotion through an international scale trade expo in Indonesia, particularly the Trade Expo Indonesia (TEI) 2015.

It will be organized on October 21-25, 2015 at the Jakarta International Expo (JIExpo), Kemayoran, Jakarta.

As many as nine countries have confirmed their participation in TEI this year, namely Brunei Darussalam, the Philippines, Indonesia, Cambodia, Laos, Malaysia, Singapore, Thailand, and Vietnam.

"TEI is our strategic promotional event to attract the world market towards Indonesias leading products and services," asserted Pradnyawati of the Ministry of Trade.

Pradnyawati, who is the director of Promotions and Image Development of the Ministrys Directorate General of National Export Development, made the remarks when launching the 30th TEI on Wenesday last week (Aug 12.)

She said that this year the Ministry of Trade is targeting 2,000 participating companies and 15,000 visitors both domestic and foreign.

Within the 50,000 square meter exhibition area, there will be products and services that are divided into several zones.

The zones cover manufactured goods and services; furniture and furnishing; food, beverages, and agricultural products; premium fashion, lifestyle, and creative products; premium products from 34 Indonesian provinces; and garden furniture.

Besides that, as a display area for Indonesias finest products, TEI 2015 will also present a Pride of Indonesia (POI) Pavilion with an area of 500 square meters.

The POI will showcase a group of products and services from Indonesian companies that have recorded achievements/good performance and earned the country a pride of strategic industry.

In an effort to increase earnings at TEI, explained Pradnyawati, the Ministry of Trade will optimize the role of its Trade Attach's and Indonesian Trade Promotion Centers (ITPCs) abroad.

The centers will conduct intensive dissemination and approaches towards potential buyers so that they would attend the TEI 2015 event.

Pradnyawati explained that TEI is an effort to boost the chances of achieving the target to increase manufactured product exports by 300 percent within the 2014-2019 period.

"However, I hope that this commitment will be supported by all stakeholders so that the TEI will be successful," Pradnyawati was quoted by the Trade Ministry on its official website as saying on Wednesday

Source: ANTARA