INDONESIA TRYING TO REDUCE IMPORTS

By Andi Abdussalam

Jakarta, Aug 29 (Antara) - Indonesia does not need to worry about the depreciation of its Rupiah currency as this could boost exports and reduce imports and encourage the use of domestically produced goods.          "The government should work hard to cut its imports while increasing the use of local goods," Marine Affairs and Fisheries Minister, Susi Pudjiastuti, said on Saturday.          She said the depreciation of the local currency should not excessively raise concerns as it was a global phenomenon and numerous other countries in the world were also experiencing the same thing.          Minister Pudjiastuti said the Indonesian government had been working hard to reduce its dependence on imports amidst the rupiah weakening against the U.S. dollar.          Therefore, she called on the public to increase their sense of nationalism and use local products with pride.          Indonesia could also follow the example of other countries which had been successful in developing their local products, such as Russia.       Pudjiastuti also urged Indonesians to consume fish if the prices of other food products, such as beef and chicken continued to soar.

INDONESIA'S IMPORTS ARE ON THE RISE

By Andi Abdussalam

Jakarta, Dec 5, (ANTARA) -Indonesia's imports have been on the rise, leaving a deficit in the country's trade balance. Yet, officials say that this phenomenon will benefit the real sector.          The value of Indonesia's imports from January 2012 to October 2012 reached US$159.18 billion, a 9.35 percent increase as compared to the corresponding period in 2011, when the value of imports stood at US$145.57 billion.          The country's imports increased in October 2012 and reached US$17.21 billion. This is a 12.6 percent increase as compared to in September 2012, when the value of imports stood at US$15.35 billion.          "The increased imports are a result of the high imports of auxiliary raw materials and capital goods such as airplanes, gas, iron and steel," said Bachrul Chairi, head of the Policy Assessment and Development Affairs of the Trade Ministry, on Tuesday.

RI CONCERNED OVER RISING IMPORTS

By Andi Abdussalam

Jakarta, Aug 11 (ANTARA) - The Indonesian government has expressed concern over rising imports that harm its trade balance, but admitted that it could not be prevented, as imports of raw materials are needed to develop industry at home.          Finance Minister Agus Martowardojo said the government was facing difficulties in preventing higher imports of capital goods and raw materials that had, until the second quarter of this year, caused the swelling of the current account deficit.          "We admit that it is difficult to avoid high imports of capital goods and raw materials, but there must be a lag between the time of importation and the time when finished products are ready for export," Agus Martowardojo said.           He said the rise in capital goods and raw material imports has widened the country's deficit, though it will be hard for the government to shun imports altogether, the finance minister said on Friday      The concern was also expressed by  Indonesian chief economic minister Hatta Rajasa, saying the hike in imports could hurt the country's balance of trade, since it could create a trade deficit.          "Unless care is taken, an increase in the imports of components could soar to hurt the balance of trade," he said.  Further, two things need to be monitored by the investment sector, improving domestic consumption and government spending, he added.           Yet, the chief economic minister believes high imports, capital goods and raw materials, in particular, would be temporary as the country was now in need of these commodities for the development of investment.           "We have analyzed the high imports of capital goods and raw materials, which are high because they are needed, but they are eventually expected to increase productivity and boost exports," Hatta Rajasa said.          Finance minister Agus added that with high imports of raw materials and capital goods, efforts to increase exports would be successful. "We will continue to improve our efforts to boost exports and, in the end, bring imports under control," Agus said.          The Indonesian central bank ,or Bank Indonesia (BI), is also watching the country's rising current account deficit following a slowdown in exports caused by a decline in global economic performance and increasing imports to meet strong domestic demand     Dody Budi Waluyo, of the central bank's department of strategic planning and public relations, said Bank Indonesia predicted the current account deficit would rise in the second quarter, but then drop in the second semester this year.          He said the rise in the current account deficit was mainly caused by low exports, while imports, especially of raw materials and capital goods, increased sharply. Capital and financial transactions, meanwhile, had recorded a significant surplus in the form of direct investment, foreign portfolio investment and withdrawals of foreign debts by the private sector.          These developments, Budi said, showed that while global economic conditions were still uncertain, foreign investors' confidence in the country's economic resilience and prospects remained high.         "In the second semester of 2012, the current account deficit is predicted to drop to a safe level to maintain national economic stability," he said.          He noted that this prediction was based upon expectations that global economic conditions and commodity export prices would improve, supported by policies made by Bank Indonesia and the government.          According to chief economic minister Hatta Rajasa, the government's effort to reduce the deficit in the country's current account will curb non-oil and gas imports by reducing the use of subsidized fuels.          "So, the subsidized fuel control system is important for the government to reduce the impact of higher imports that could hurt the trade balance deficit," he said.          He noted that the high imports were composed of 72 percent raw materials, 7 percent consumption goods and 21 percent capital goods.          The import of capital goods recorded the highest growth due to rising demand for imported products, such as airplanes and spare parts, which rose 73.7 percent and motor vehicles and spare parts (45.3 percent), iron and steel products (43.3 percent) and mechanical appliances (25.4 percent).          Further, non-oil/non-gas imports in the first half of 2012 increased 16.5 percent to US$74.9 billion, from the same period last year.          Oil/gas imports in the January-June 2012 period reached US$21.4 billion, an increase of 11.4 percent compared to the same period last year, fueled by rising gas demand which surged 149.8 percent to US$1.8 billion, he said.           Also, according to Trade Minister Gita Wirjawan, Indonesia's import of capital goods in the first semester of 2012 rose 34.9 percent to US$19.4 billion year-on-year.          Indonesia's imports in the first half of 2012, meanwhile, reached US$96.4 billion, a 15.3 percent increase compared to the same period last year and the import of consumer goods rose by 6.5 percent to US$6.8 billion from a year earlier. However, the import of raw and auxiliary materials increased 11.8 percent to US$70.3 billion year-on-year, he said.          The strong growth in the import of capital goods and raw materials was attributed to growing investment inflows and the rising demand for industrial products, he added.          In order to reduce imports, Hatta Raja called on parties in the investment sector to strive not to use imported materials so they might reduce the negative impact of imports on the nation's balance of payment.          Additionally, the minister personally asked the Investment Coordinating Board to make a priority of domestic, rather than imported products.          Regarding domestic consumption, the minister called on all parties to continue safeguarding the domestic market and control inflation so they would not erode economic growth.         "We must continue so imports will not be too large and inflation would not be too high," he said.          He also called on companies to cut down on their imports of raw materials to help reduce the trade deficit. He said those companies that could reduce their imports would  be offered incentives by the Indonesian government.          He added that the government plans to provide tax allowances to industries which reduce their imports.       "Incentives such as tax allowances or a tax holiday will be granted, if necessary, to industries, especially in the manufacturing sector, which use imported raw materials for its finished products," he said.***2*** (T.A014/INE/H-YH/KR-BSR/A/H-YH) 11-08-2012 21:23:

RI WORKING ALL-OUT TO PREVENT ENTRY OF ILLEGAL GOODS

By Andi Abdussalam

Jakarta, Nov 18 (ANTARA) - Indonesia is now making all-out efforts to ward off a possible influx of illegal imports amid the global financial crisis.

        While centralizing the entry points of imports, strictly supervising the flow of commodities and restricting the importation of certain goods, the government is also closing at least 46 seaports scattered across the country's archipelagic territory comprising 17,000 islands.

        The government intends to centralize the points of entry of foreign-made goods susceptible to smuggling in order to simplify their supervision.

        "I want the customs directorate general to secure import activities and consider the possibility of centralizing the points of entry of certain commodities," Finance Minister Sri Mulyani said.

        She said the certain commodities she meant were those easily smuggled into the country such as electronics and textiles.

        Indonesia is losing US$600 million annually in unpaid taxes on illegally imported textiles and textile products.

        Therefore, the government will restrict the importation of certain commodities and centralize the entry points of imports.

        The decision to restrict imports was taken as part of the government's ten-point policy to cope with the current financial turmoil, which was announced in a limited cabinet meeting last month.

        Commodities whose imports will be restricted are garments, electronics, food, drinks, toys, and footwear. These goods can only be imported by licensed/authorized importers on condition the goods have been verified at their ports of origin.

        Besides, their entry points are also centralized in five main seaports. Centralizing the points of entry for those goods meant they could be imported only through certain ports in Indonesia.

        Imported commodities will be unloaded only at certain designated ports, namely Tanjung Priok in Jakarta, Tanjung Emas port in Semarang (Central Java), Tanjung Perak port in Surabaya (East Java), Belawan port in Medan (North Sumatra), Makassar port in South Sulawesi, and at two airports, namely Soekarno-Hatta and Juanda aiports.

        In the meantime, the Ministry of Transportation ordered the closing of 46 unofficial seaports which were believed to have been used as entry points for smuggled goods.

        "We are ready to close about 46 seaports," Transportation Minister Jusman Syafii Djamal told the press on Monday.

        The minister said most of the ports were located in Riau Islands and Batam. He had ordered port administrators of Belawan, Tanjung Priok, Tanjung Perak and Makassar to take firm actions and close illegal ports in their respective areas.

        Belawan port administrator Jimmy Nikijuluw said he was ready to close illegal ports in his area. "It is just a matter of time. We are going to close them," he said.

        Sea Director General Sunarjo said meanwhile port administors were working hard to collect data for closing the ports. "They are collecting data and will soon take action", he said.

        Aside from the government's efforts in closing illegal seaports, the Directorate General of Customs and Excise is also ready to anticipate the influx of illegal imports in the current global economic meltdown.

        Director General of Customs and Excise Anwar Suprijadi stated his office and its units in the field was ready to anticipate illegally imported goods from the US and Europe in the wake of the monetary crisis in those two parts of the world.

        "The customs office has anticipated the illegally imported products including those ordered from the US and Europe," Suprijadi said.

        Since the outbreak of the global financial crisis, many product orders from the US and Europe had been canceled.

        Thus, concern has arisen that canceled exports to the US and Europe are being diverted to Indonesia. The government is urged to take strategic steps and increase supervision over the possible entry into Indonesia of illegal textile and textile-products.

        "There are many countries which export textile and textile products to the United States. With the closure of the export market in the United States, it is not impossible the exporting countries will divert their exports illegally to Indonesia," Ina Primiana of the University of Padjadjaran said.

        The United States has been the main textile and textile product market of producer countries in Asia and Europe.

        With the drop in textile and textile product transactions in the United States, the producer countries would divert their exports to new markets, and Indonesia with its large population would obviously become their target.

        Accordng to Benny Soetrisno, chairman of the Indonesian Textile Producers Association (API), the increasing inflow of illegal textile and textile products was causing the Indoensian state a loss of about Rp600 million per annum.

        Therefore, the entry points of imports must be centralized so that goods entering the country would be supervised easily. The five main ports will serve as the main entry points.

        "Goods arriving at other ports will not be allowed in. So, for instance, any foreign-made textile shipment entering through other ports will be considered illegal and this will simplify supervision," Minister Mulyani said.

        The minister said reducing illegal imports and smuggling was a step to anticipate a glut in imported goods as a consequence of shrinking world markets.

        In order to carry out supervision in the country's territorial waters which cover at least 17,000 islands, the government is to establish a sea and coast guard force.

        "If everything runs as planned, we will have set up the Indonesia Sea and Coast Guard at the end of 2009," Transportation Minister Jusman Syafii Djamal said. (T.A014/A/HAJM/A/S012) 18-11-2008 14:58:44