February 09, 2021 | Invest Indonesia

International Trade Agreements Will Drive RI’s Economic Recovery: Govt.

Source from: Antara News

Original News HERE

Trade Minister Muhammad Lutfi highlighted his ministry’s efforts to step up non-oil and gas exports to bolster recovery of Indonesia’s economy battered by the COVID-19 pandemic by optimizing international trade agreements.

“To achieve the non-oil and gas export growth target, we must open up the Indonesian market and collaborate with various countries through existing trade agreements. This is also an effort to increase the added value of each exported product,” Lutfi noted in a statement here on Tuesday.

The minister spoke of his plan while addressing the 2021 National Seminar on the Indonesia Economic Outlook (IEO) held by the Indonesian Economic and Development Study (Canopy), the Faculty of Economics and Business (FEB), the University of Indonesia.

The existing international trade agreements comprise the Regional Comprehensive Economic Partnership (RCEP), Indonesia-Korea Comprehensive Economic Partnership Agreement (IKCEPA), Indonesia-Pakistan Preferential Trade Agreement (IP-PTA), and Indonesia-Australia Comprehensive Partnership Economic Agreement (IA-CEPA).

Indonesia’s trade balance in 2020 posted a surplus of US$21.7 billion, the highest since 2012. However, the large surplus was owing to a sharp decline in imports.

Exports in 2020 only dipped by 2.6 percent year-on-year (YoY), while imports plunged by 17.3 percent YoY.

Lutfi pointed out that the countries contributing to Indonesia’s trade balance surplus were the United States, (US$11.13 billion surplus); India, (US$6.47 billion); and the Philippines, (US$5.26 billion).

The top five export products clocking the highest positive growth during the 2019-2020 period YoY were steel, at 46.84 percent; jewelry, 24.21 percent; crude palm oil (CPO), 17.5 percent; furniture, 11.64 percent; and footwear, 8.97 percent.

Last year, the steel commodity ranked third in Indonesia’s non-oil and gas exports, with a contribution of seven percent, or US$10.85 billion. Indonesia is the second-largest producer of iron and steel in the world after China. In fact, over 70 percent of Indonesian steel was exported to China.

In 2020, jewelry products ranked fifth in Indonesia’s non-oil and gas exports, with a contribution of 5.3 percent, or a value of US$8.2 billion. Almost 80 percent of the jewelry products had been exported to Singapore, Switzerland, and Japan.

Furthermore, the government will continue to oversee and ensure the security of Indonesian products traded overseas through the application of trade diplomacy.

Translator: Sella PG, Fardah
Editor: Rahmad Nasution