Indonesia to divert exports to new markets amid languid global demand

JAKARTA (The Jakarta Post/Asia News Network): The Trade Ministry has announced that it will refocus on the export of goods to nontraditional markets in a bid to offset the risk of reduced demand from major trade partners.

In a keynote speech to open the annual Indonesian Trade Expo, Trade Minister Zulkifli Hasan stated that the government would increase export volume to several regions, including Africa, South Asia, Central Asia and the Middle East.

Statistics Indonesia (BPS) data show that from the top 10 export destination countries in September, only India came from these regions, while the rest came from North America, East Asia, Europe and Southeast Asia.

“We could even explore [export possibilities in] Eastern Europe, and if we want to take things further, to Latin America,” Zulkifli told expo participants on Wednesday (Oct 19).

The need to refocus on nontraditional export markets stems from the risk of a global economic slowdown, as diversifying means less exposure to economic turbulence in destination countries.

The African continent's and Indian subcontinent's huge populations are a must target for exports.

In both markets he estimates total populations of around 1 billion and 1.5 billion people, respectively, meaning a big pool of consumers to purchase clothes and food. The government will also find opportunities to deliver more goods to the Middle East, and in particular Saudi Arabia.

“This is a gift of our agreement with the United Arab Emirates [UAE],” Zulkifli continued, “As the nontariff stipulations mean that our goods could enter the UAE and continue to Africa, South Asia, Central Asia [and the] Middle East.”

Speaking at the same event, President Joko Widodo said that Indonesia had received praise from the International Monetary Fund for being a “bright spot” amid the global economic gloom, which increased the nation’s global trust.

He stated that as Indonesia’s trade surplus continued into its 29-month consecutive run, the estimated US$10 billion deals from the expo would assist in maintaining this surplus in the coming months.

BPS data show that Indonesia’s trade surplus from January to September was US$39.87 billion, almost 13 per cent higher than the total surplus of last year.

“It is acceptable for other countries [to experience a dark year]. Our country must remain optimistic but still cautious, because the storm is unpredictable,” the commander-in-chief said.