Expanding Indonesian Export Markets to Africa, South Asia

TEMPO.CO, Jakarta - The 31st Trade Expo Indonesia (TEI) this year surprised many as several Asian and African countries dominated business transactions, replacing the US and European countries which used to be traditional major buyers during previous TEIs.

The country's largest export exhibition recorded transactions worth US$974.76 million, with five nations emerging as the largest contributors, including India, Malaysia and Egypt. The two others were Switzerland and France.

At US$ 826.52 million, goods transactions topped the list, followed by the service sector at US$48.23 million.

In all, 15,567 potential buyers from 125 countries participated in the expo. Of these, 110 countries had indirect transactions with domestic businesses.

At TEI 2016, the potential buyers came not only from Indonesias traditional export destinations, but also from countries in Africa, the Middle East, South Asia and Central Asia.

During the expo, for instance, 56 buyers from India booked transactions worth US$82.845 million for products such as spices, furniture, handicraft, and medical equipment, plus US$ 460,000 for investment or joint ventures.

TEI 2016 was expected to be a turning point in national export performance, according to Indonesian Trade Minister Engggartiasto Lukita.

The minister believed that the exports can stabilize and even improve if new markets are explored.

In fact, President Joko Widodo (Jokowi), in his opening remarks at the five-day TEI 2016 on Oct. 12, urged the Indonesian exporters to expand to new markets, particularly to African countries such as Nigeria, and South Asian nations such as India and Bangladesh which have huge population.

Penetrating African and Indian markets, among other things, will be ideal for the Indonesian products in the long term, he added.

"Pay attention to penetrating new markets that we have so far ignored, and paid no attention to, such as India and African countries that have populations of more than 60 million," President Joko Widodo (Jokowi) suggested at the Jakarta International Expo (JI-Expo), Kemayoran area, Jakarta.

He noted that there are opportunities for Indonesian products to enter African and Indian markets, as well as those in Bangladesh, Iraq and Latin American countries.

Furthermore, countries such as China, Nigeria, Malaysia, India, Saudi Arabia, Thailand, the United Arab Emirates, Papua New Guinea, and Bangladesh, had sent large delegations to the TEI 2016.

The presence of such a large number of foreign buyers could help open up new markets for Indonesian products.

Towards this end, Minister Lukita has been encouraging domestic exporters to enter into trade contracts with foreign buyers and explore international markets.

"Business relations established (during the expo) are a precious asset. In addition to direct transactions, TEI (can bring in) long-term investment," Lukita noted.

SMEs are considered a key to help boost the countrys exports, and, therefore, the government is assisting in developing these further.

Industry Minister Airlangga Hartarto has called upon small- and medium-scale industries to improve their capacity and access to funds so as to explore new markets for exports.

Improved capacity and greater access to funds, equipment and technology will help them explore potential markets in Africa and Latin America, the minister commented.

While Africa and Latin America both need products such as garments, furniture, pulp and papers, Indonesia could import agricultural items such as beef and soybean from Latin America, Hartarto underlined.

This year, the expo was themed, "Indonesia: Source of Natural and Creative Products," and is exhibiting various products that demonstrate creativity and design innovation.

These products are expected to boost diversity in the export market.

The expo also opened wider opportunities for small and medium enterprises (SMEs) to increase exports by providing services in the form of designers and offering a bigger participation in the event.

"TEI brings in potential buyers from abroad to see Indonesian products, including products manufactured by the SMEs," Director General of the National Export Expansion Sulistyawati explained.

Sulistyawati pointed out that many areas in Indonesia have immense potential to export goods to traditional export destinations and new markets.

Several SMEs signed deals at least worth US$82,000 at the TEI including that between Rumah Tikar Vinto and Turkish buyers valued at US$30,100 and with Japanese buyers worth US$21,500.

In the meantime, the countrys balance of trade in the January-September 2016 period recorded a surplus of US$5.67 billion, with exports amounting to US$104.36 billion and imports totaling US$98.69 billion.

Over the period, Indonesia recorded a surplus of US$6.28 billion in its trade with the United States, US$4.94 billion with India and US$1.69 billion with the Netherlands, Chairman of the Central Bureau of Statistics (BPS) Suhariyanto underscored on Oct. 17.

ANTARA