Indonesia’s Trade Balance was for the time being having deficit against main trade counterparts like China, Japan, Thailand, South Korea, Singapore, Taiwan and some countries in Uni Europe region. In view of the unsatisfactory export performance, the Indonesian Chamber of Commerce [KADIN] urged the Government to make overall reforms in international trading. Chairman of KADIN Suryo Bambang Sulisto in Jakarta on Monday [17/7-2012] stated that he was most disheartened by the ever-eroded national forex reserves due to swelling import and shrinking export. Therefore, KADIN urged the Government to radically change the policy.
According to Suryo, the most important thing now was how to jack up export and minimize import. Supposedly The Government en change policy which jack discourage import and inject more incentives which jack up export. “In reality, many regulations held back export” Suryo said.
According to Suryo, when deficit in trading and deficit in current transaction were alarming today, the Government’s priority was to jack up export to the maximum. But what was happening now was imposition of various taxes. Suryo did not explicitly mention which regulation obstacle export but it seemed that he meant was the export tax on mineral ores which recently reduced export to many countries. Suryo added on that the Government’s policy totally prohibit export of raw minerals as per 2014.
On the other hand Suryo supported the policy of the Ministry of Trade which prioritized promotion of export and promote people’s purchasing power. The policy for international trading was focused on stepping up competitiveness was exercised through market diversification and smoothness of traffic flow. The fundamental handicap of Indonesia’s trading, according to Suryo, was downturn of trading performance and weak competitiveness of products.
Suryo rated that the Government needed to accomplish some homework in regard to export chain and some factors that caused high economic cost. Firstly, the cost of container clearing at the seaport was still the highest in ASEAN. Secondly the cost of illegal collection was at least 7.5% of export cost. Illegal collection [pungli] were still prevalent in scale bridges, in Jakarta or in the regions. Thirdly, Indonesia’s industry was still facing the problem of high content of imported components in products, intermediate components, and components for the industry constituting 28% - 90%. Other problem in industry was poor command of technology.
To quote WTO’s data, growth of the world’s economy in 2011 was only 5.0% or slipping steeply against 2010 which was posted at 13.8%. In 2012 growth rate was 3.7% or being below average of growth over the past 20 years which reached 5.4% per year. The downturn was on account of global problems like debt crisis in Europe, natural disasters in some countries like: tsunami in Japan, flood in Thailand and disaster in China and polical instability in Lybia, Egypt, and Tunisia which interrupted the world’s oil supply.
The growth of average import-export value or volume per annum or trend of long-term growth were the main indicators of Indonesia's trade performance was visible from the average annual growth which were relatively low compared to competing countries or growth was also indicated by long term growth increased. the trend of long term growth represented long term changes which were positive in terms of product competitiveness in global trading.