READING BALANCE OF TRADE

         The balance of trade of the Republic of Indonesia has been alarming because surplus in the balance of trade has continued to reduce. The export does not increase significantly, while the import soars (www.mediaindonesia.com, 9/4/2012). Is it true? The following description would answer the question.

        Data at the Central Board of surplus of US$ 692.8 million in the balance of trade in February 2012, compared to US$ 923.4 million in January. The decreasing surplus is attributable to the imbalanced growth of the export and import in February. Indonesia recorded the largest deficit in bilateral trade with Thailand, China, Japan and France.    

            The export of non-oil and gas commodities was indeed lower in February 2012, compared January 2012. The decrease is visible in most of the main export destination countries, namely India, Japan, Malaysia, South Korea, Britain, Germany, Taiwan and Australia. Amid the decrease, the export to China, Singapore, Thailand, France and the United States increased. However, data at BPS show that the total export to 13 main destination countries decreased by 1.88%. Briefly, the export value was lower, compared to the same period last year. The share of the industrial sector in the export reduced from 62.73% to 60.27% and the contribution of the agricultural sector decreased from 2.74% to 2.62%.

            In the meantime, the import value rose by 2.74% month and 27.26% year to year. Compared to January – February 2011, the import from 13 main import destination countries rose by 21.25%, mainly driven by the rising import from China and Japan, from which the import rose by US$ 1,088 million (32.73%) and US$ 798.1 million (28.70%) respectively, Indeed, the main importer of non-oil and gas commodities in January – February 2012 was China, with the import value US$ 4.41 billion, accounting for 19.9% of the total import.

            Surely the above mentioned data are uneasy for us. Slowly but sure, Indonesia started to be dragged to the loser side in free trade era. In relations thereto, we welcome positively the action of Trade Minister Gita Wirjawan to seek inputs from former trade minister. Even though the recent meeting was called as courtesy call and intended to discuss issues, the government needs to seek inputs from figures once leading the trade ministry in the past. The discussion is important to find the weaknesses of Indonesia in the current free trade era. Far before the trade liberation was applied, parties actually reminded the government of two possibilities in free trade, namely gain or loss. Since free trade is not identical with freedom of trade, the role of diplomacy becomes more important. Surely, the diplomacy constitutes domain of the government. The recent visit of British Prime Minister David Cameron to Jakarta was a diplomatic visit in the framework of seeking market for British products when economy of the country melts down.

            We must concede that we are not in the benefited position in free trade and the main cause is rather internal. In relation thereto, the government must work harder and smarter to drive up export, as well as facilitate domestic business communities so as to be able to expand export market.

 Business News - April 18, 2012