Jokowi Faces Tough Challenges in Trade Sector
8 October 2014 18:44 WIB
TEMPO.CO, Jakarta – Trade Deputy Minister Bayu Krisnamurti said the incoming government of president-elect Joko Widodo and vice president-elect Jusuf Kalla would face tough challenges in the trade sector.
According to Bayu, the export target has been slashed from the normal projection of 4-4.5 percent to a pessimistic scheme of 2.5-3 percent. He added the reduced export target was a chance for Jokowi-Kalla to observe the nation's realistic economic conditions.
“We provide space for the new cabinet to review. No pretending and no cover-up that the condition is tough,” said Bayu on Tuesday.
He continued that the reduced target ensued from the decreased prices of two main export commodities: crude palm oil (CPO) and coal. The price of CPO was trimmed by 20 percent from US$920 per metric ton in January 2014 to US$726 per metric ton while the price of coal was decreased by seven percent.
Based on the Central Statistics Agency (BPS) data, the realization of trade balance until August 2014 had reached US$1.41 billion. As a result, the government cut 2014 export target by 3-5 percent from the initial target of US$190 billion to US$180.5 billion.
According to Bayu, the government still has a chance to improve this condition by boosting mineral exports, especially after the completion of renegotiation between the government and PT Newmont and PT Freeport. Additionally, from non-oil and gas commodities, there is an increase in automotive and spare part exports whose investments have run since 2011-2012.
AISHA SHAIDRA