Indonesia seeks new markets in anticipation of full-blown European crisis

Rabu, 15 Agustus 2012 | 09:23

In anticipation of a full-blown financial crisis in Europe, Indonesia has continued to take various steps, including expanding its market base to Latin American countries."Market diversification is going on and it very important to minimise the impact of the European crisis, which has already affected China and India," Chief Economic Minister Hatta Rajasa said here on Tuesday.

"Indonesia relies on 10 export commodities, including rubber, footwear, textile, electronics, and agricultural and plantation commodities such as palm oil," he added.

"Frankly speaking, our exports did not drop in terms of volume, but the prices of almost all export commodities slumped, including that of rubber," Hatta noted.

"The price of rubber for shipment in October was down 5.1 percent to US$3,317 per tonne," he pointed out.

Hatta said it was the right time for Indonesia to diversify its exports to Latin American countries, such as Brazil, Argentina and Colombia.

"Market diversification is one of the measures taken by the government to reduce the trade deficit caused by soaring import of raw materials, including agricultural commodities such as soybean, rice and sugar," he added.

"We must be able to manage the domestic market so it does not become a dump for all sorts of imported products," Hatta said.

He noted that the domestic industry's growth was crucial to meeting the national economic growth target of 6.8-7.2 percent in 2013.

"Besides maximizing exports, the government will also allocate a bigger budget for infrastructure development, reaching more than Rp200 trillion in the 2013 draft budget," Hatta stated.

Meanwhile, Finance Minister Agus Martowardojo said the government would make a quality draft budget for 2012 by, among other things, allocating funds for purchase of productive goods that have added value.

He expressed hope that the plan would lead to inclusive and sustainable economic growth for Indonesia. "We must remain alert as the European economic crisis will also affect Indonesia," Agus added.(*)