Tuesday, 12 January 2021 04:49

The Ministry of Trade Aims to Make Indonesia to Become An Exporter of High Value Products

The Minister of Trade Muhammad Lutfi has a big mission to improve the structure of national exports. Having long struggled as a trader of raw commodities, Lutfi said Indonesia was facing a new phenomenon in which high-value products would become the basis for exports. To achieve this mission, Lutfi said the smooth flow of goods must be guaranteed and 2/3 of the imported products that enter must be supporting raw materials or capital that have a domino effect on the economy, one of which is imports to support exports of manufactured products. "If the flow of goods runs, it means that the Indonesian economy will run well. "Raw materials and auxiliary goods are usually used for export and drive the economy, especially domestic manufacturing," Lutfi said at a press conference in Jakarta, Monday (11/1/2021).

The Ministry of Trade in the Ministry of Trade's Strategic Plan 2020-2024 describes the trade surplus is targeted to only reach US $ 1 billion, or much lower than the surplus during January-November 2020 which reached US $ 19.6 billion. However, this target also gives a positive signal that the need for imports for the domestic manufacturing industry will increase considering that the non-oil and gas export target is pegged to grow by 6.3 percent.

Lutfi said the openness of the Indonesian market would be important because the future trend of Indonesian exports would rely on high-value products that require investment and an established industry to be competitive. He gave an example of the export performance of the automotive and iron and steel industries, which until November 2020 were included in the list of the top five contributors to non-oil and gas exports, with a value of US $ 5.86 billion and US $ 9.64 billion respectively. "I can confirm that these two items are new phenomena of Indonesian exports in the future. And this is in direct contact with our trade agreement,”he said. Lutfi said the effort to increase the export of high-value products could not be achieved without being accompanied by market access guaranteed through trade agreements. It will be difficult for Indonesian products to penetrate both traditional and non-traditional markets due to high import duties. "If we don't have good trade, especially to emerging markets, these goods cannot become a base for exports. In the past, in the context of competition we sold as much as possible and sold as little as possible, but in the future this phenomenon will change because in an era of collaboration like this is how we want big exports, we must also open our market to be competitive, ”he explained.

As is known, Indonesia's trade agreements to a number of non-traditional countries are still limited. Indonesia is noted to have just ratified the Indonesia-Mozambique Preferential Trade Agreement (PTA), Indonesia's first trade agreement with an African country. In addition, there is also a comprehensive cooperation agreement between Indonesia and the European Free Trade Association (Indonesia-EFTA CEPA) and Indonesia-Chile CEPA, which is the only Latin American country that has a trade agreement with Indonesia.

Source: https://m.bisnis.com/amp/read/20210111/12/1341450/kemendag-bidik-indonesia-jadi-eksportir-produk-bernilai-tinggi

 

 

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