Govt to Cut Imports

TEMPO.CO, Jakarta - Indonesia does not need to worry about the depreciation of its Rupiah currency as this could boost exports and reduce imports and encourage the use of domestically produced goods.

"The government should work hard to cut its imports while increasing the use of local goods," Marine Affairs and Fisheries Minister, Susi Pudjiastuti, said on Saturday.

She said the depreciation of the local currency should not excessively raise concerns as it was a global phenomenon and numerous other countries in the world were also experiencing the same thing.

Minister Pudjiastuti said the Indonesian government had been working hard to reduce its dependence on imports amidst the rupiah weakening against the U.S. dollar.

Therefore, she called on the public to increase their sense of nationalism and use local products with pride.

Indonesia could also follow the example of other countries which had been successful in developing their local products, such as Russia.

Pudjiastuti also urged Indonesians to consume fish if the prices of other food products, such as beef and chicken continued to soar.

In line with its efforts to reduce imports, the Ministry of Agriculture has assured that it will not import rice and guaranteed that current domestic stocks are adequate.

"We are confident that food stocks are secure even though there is a long drought that has hit a number of regions in Indonesia," the expert staff of the Agriculture Minister, Sam Herodian, said after attending a rice harvest in Lebak District, Banten Province, on Wednesday, August 12.

Herodian said Indonesia's food production had increased by about 5.5 million tons. Last year, the country's rice production was pegged at about 70 million tons. This year it is expected to rise to 75.5 million tons.

Thus, in terms of food, Indonesia could be self-sufficient this year. This would also help the government in cutting imports amidst the current global economic gloom.

According to Danis H. Sumadilaga, a member of the Public Works and Housing Minister's expert staff, the Indonesian government is making every effort to reduce the country's dependence on imported goods and encouraging the use of domestic products to achieve economic self-reliance.

Economic self-reliance can be achieved by creating food sovereignty through the improvement of irrigation networks, which have so far irrigated three million hectares of rice fields and the created one million hectares of new rice fields, he emphasized.

"We have to create economic self-reliance by empowering strategic sectors of the domestic economy and achieving sovereignty in the strategic economic sectors, so that we can reduce dependence on imported goods," Sumadilaga noted.

Trade Minister Thomas Lembong had earlier remarked that the import of food commodities was aimed at easing the inflation rate following a surge in the prices of food products due to low stocks.

"If we allow the import of food commodities, the trade balance will still be okay, and the inflation rate will fall significantly," Lembong said at a pressconference on financial notes on Friday.

He admitted that food commodities have a major impact on goods and services, and Indonesia's food imports are not too large, compared with its overall imports.

The Agriculture Ministry had earlier made an assurance that food stocks were sufficient to meet the nation's needs, and Indonesia would not need to import rice.

In the meantime, Trade Minister Thomas Trikasih Lembong saidIndonesia needed to develop import substitute industries to produce goods and to substitute products imported so far.

"In order to control exports and imports, we need to develop imported good substitution processing industries," Lembong said recently.

He said one of the sectors that could contribute to inflation was food imports. With the importation of various goods, the inflation rate would increase.

"Apart from that, exports would also have a big influence on the mission by achieving a growth target of 5.5 percent at the end of the year," the minister said.

He added: "We have self-sufficiency as a good target. All this needs time and process. If the imports are drastically stopped, it could adversely increase the prices of goods. And this is inflation," Lembong remarked.

The Trade Minister also cited ship production at home as an example in the development of import substitution industries. Indonesia is in the stage of developing an industry to build locally produced ships. It is also aiming to produce ships for export.

With substitution import industries, the minister hoped that Indonesia's trade balance will improve by about 1 percent, which will in the end also increase the gross domestic product.

He said another way to improve the quality of exports and imports was to develop a new terminal lane in the Tanjung Priok Port in North Jakarta.

"The flagship industries for exports and imports are automotives or vehicles, but I do not think we have good facilities at Tanjung Priok Port," he said.

In other words, if Indonesia is willing to reduce its imports, it has to produce those goods itself, he added.

ANTARA