Kamis, 04 Februari 2010

FREE TRADE BOON TO INDONESIA'S EXPORTS

By Andi Abdussalam

Jakarta, Feb 2 (ANTARA) - In the present free trade era, the dependence of  many countries on Indonesia's raw materials will benefit Indonesia's exports as the import tariff rates of many commodities are even reduced to zero percent.

        Thus, the implementation of the ASEAN free trade area as of January this year will benefit Indonesia's exports, particularly exports to China. This is because China and ASEAN had in 2004 agreed to adopt the ASEAN-China Free Trade Agreement (ACFTA).

        Head of the Central Bureau of Statistics (BPS) Rusman Heriawan said that the ASEAN-China Free Trade Agreement would provide opportunities for Indonesia's economy, particularly natural resources' exports.

        He cited as an example crude palm oil (CPO) export to China where Indonesia, with the free trade agreement, would be able to export the commodity without tariff barriers so that the chance to export CPO to China would be higher.

        So far, importers have however expressed concern that the implementation of free trade area with China would cause the country to be flooded with Chinese goods. According to the ASEAN Secretariat, as of 1 January, 2010, a total of 54,457 tariff lines are reduced to zero under the AFTA scheme.

        Yet, along with the recovery of the world economy, free trade would on the other hand benefit Indonesia's exports.

        Finance Minister Sir Mulyani Indrawati said there were already indications that the trade sector, particularly exports, would recover along with the general economic recovery this year. "The latest figures  show indications of recovery in the export sector," the minister told a plenary meeting of the House of Representatives at the parliament building on Tuesday.

         Based on the Central Bureau of Statistics data in 2009,  the negative condition of the economy was not too bad so that in 2010 when economic recovery is to begin, the export sector is expected to contribute to the economy in a positive way.

         "Exports in 2010 will be positive along with the global economic growth by about 3.2 percent, especially in the emerging markets such as China and India which are expected to see rapid growth," Rusman Heriawan said.

         Trade Minister Mari Elka Pangestu explained that during 2009, the market segment of Indonesian exports in emerging market countries like China increased from 6.2 percent in 2004 to 8.9 percent in 2009.

         "It shows that China's economic growth is good and there is potential use of lower tariffs for certain products such as CPO. Before the free trade agreement (FTA)'s implementation, CPO exports used a quota, but after the FTA the quota system will be phased out," she said.

         Indonesia's exports in 2009 reached US$166.49 billion while its imports were recorded at US$96.86 billion, according to the BPS data.

         Thus, recovery in 2010 is expected to provide a positive contribution, according to Finance Minister Sri Mulayani. She said that products which were expected to become Indonesia's primary export commodities were raw materials, CPO and coal.

         "We have the opportunity in the natural resource-based commodities. It is the very opportunity that we are conducting a research in detail. Like it or not, the zero percent tariff is our export opportunity," she said.

         However, the minister said, the recovery in the export sector would not have relations with imports because the importation of manufactured good components was still high in Indonesia.

         "The high export and import will reinforce the balance of payments and will lay the foundation for  future economic stability. After all, the dependence of other countries on our raw materials would be much decided by prices in the market," she said.

         Unluckily, in terms of trade with China,  the value of Indonesia's imports is higher than that of its exports to that country. The Ministry of Trade said Indonesia's imports from China in the January-October 2009 period were higher than the exports.  
    Mari Elka Pangestu told a hearing with the House  recently  that China has been Indonesia's fifth biggest export destination in the world after the European Union, Japan, the United States, and Singapore.

         Indonesia's exports to China in that period reached 9.05 billion US dollars, a 12.04 percent decline compared to those in the same period of 2008.

         Virtually, Indonesia's overall exports in 2009 decreased by 14.98 percent compared with their figure in the preceding year, according to the BPS.

         "Exports in the January-December period in 2009 reached US$166,49 billion or down 14.98 percent compared to figure for the same period in 2008," BPS Chief Rusman Heriawan said.

         Non-oil/non-gas exports also decreased in value by 9.66 percent from US$97.47 billion in 2008. The decline almost matched the minus 10-11 percent prediction made by the government.

         On the other hand the country's imports in the same year also dropped.  Indonesia's imports in 2009 plunged 25.03 percent to US$96.86 billion from a year earlier, the BPS said.   "In December 2009, Indonesia's imports reached US$10.33 billion, up 17.15 percent from November 2009 when the figure was US$8.81 billion," Heriawan said.

         In 2009, Indonesia's non-oil/non-gas imports stood at US$77.87 billion, a 21.06 percent decline compared to the year before.  "In December 2009 alone, non-oil/non-gas imports reached US$8.22 billion, up 17.75 percent from November 2009," he said.

    (T.A014/A/HAJM/20:26/H-YH)
(T.A014/A/A014/A/H-YH) 02-02-2010 20:42:06


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