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WITH
costs of exports mounting in China, outsourcing
focus has lately turned to India and Vietnam
with a view to developing intra-Asian trade
links. But perhaps deserving as much if
not more attention is Indonesia where steps
are being taken to enhance export potential.
In
the view of Maersk Line, outlined in its
latest country analysis in its "Moving
Global Trade" report, suggests that
Indonesia is worthy of exploration given
the global macro-economic picture, which
is not good. The International Monetary
Fund (IMF) reduced its predictions for world
GDP growth in 2015 from 3.9 per cent to
3.5 per cent and the US has suffered first
quarter GDP shrinkage of .07 per cent.
Maersk's
country manager, Jakob Sorensen, president
director of Maersk Line in Indonesia, first
looks at the background.
"Global
container trade growth for the year is now
expected to be in the lower end of three
to five per cent," he said. "In
the first quarter, we have seen an increase
in export volumes to the United States,
driven by the US economy and the stronger
US dollar. However, exports to Europe have
seen slowing growth compared to last year,
as the inventory build-up has come to a
stop.
"Exports
to oil dependent nations such as West Africa
have also fallen due to the drop in oil
price," he said.
Meanwhile,
Indonesia's trade balance has a surplus
of US$2.43 billion for the first quarter,
largely influenced by the export performance
which reached $39.13 billion, compared to
the import figure of $36.70 billion for
the same period.
Despite
a slowdown in Indonesia's key commodity
exports such as palm oil and minerals, there
has been increase in exports of agriculture
commodities. Consumer spending which has
previously supported growth in the country
is having less of an impact, due to the
weak Rupiah and higher prices.
"We
have seen a drop in imports of raw materials
to Indonesia by 17.8 per cent year-on-year,"
said Mr Sorensen.
One
of the recent highlights with regard to
Indonesia's export policy is related to
fisheries. The prohibition of transshipment
in the middle of the sea has contributed
to a significant drop in exports of fish
products.
While
the intent is to stop illegal fishing, it
has also resulted in a drop of 15 per cent
of fish products in the first three months
of 2015.
Another
policy development which is expected to
have a significant impact on trade volumes
occurs within the automotive sector. The
Ministry of Trade has announced a limit
on the number of imported automotive products
in the form of Completely Knocked Down (CKD)
and Incompletely Knocked Down (IKD).
The
number is limited to 100,000 units per year
starting from 23 March 2015. In addition,
it will be mandatory for automotive importers
to start exporting automotive products three
years down the road.
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