Trade Balance Still Haunted by Deficit

TEMPO.CO, Jakarta - An economist from Institute for Development of Economics and Finance (Indef), Enny Sri Hartati, forecasted that the balance of trade will still show a deficit this year. This is because oil and gas imports cannot be reduced immediately. “Meanwhile, the amount of non-oil and gas exports is not large,” she said to Tempo on Wednesday.

Enny predicted that the deficit will range from US$2 billion to US$5 billion this year, lower than the amount of deficit in January-November 2013, which ranged from US$5 billion to US$6 billion. The improvement is due to positive global economic performance. “Commodity prices are also getting better,” she said.

To prevent a larger deficit, Enny urged the government to be cautious for increased fuel consumption, particularly near the General Election. “Moreover, the oil price tends to rise at the beginning of this year.”

On the other hand, Enny emphasized the importance of non-oil and gas export. According to her, the government must expand to and open new export markets in non-traditional countries, such as Middle East and Africa. Enny found the government and exporters have been monotonous in selecting market, whereas such expansion can be realized by increasing competitiveness and strengthening bilateral relationships with many countries.

From her office, the Director General of National Export Development of Trade Ministry, Nus Nuzulia Ishak, predicted that export value in January-December 2013 was US$179 billion. According to her, export this year will increase by 5 percent or US$190 billion. “The target is possible provided that a policy supporting the improvement of Indonesian exporters’ capacity and competitiveness has been made,” she said.

This year, budget for her institution will be Rp231 billion, she said. The fund will be utilized to finance 179 domestic and overseas promotion activities. Of all promotion agendas, 55 percent will be executed in non-traditional export market and 41 percent of them will be in traditional countries. “The rest is executed domestically,” she added.

In addition to promotion, Nus suggested that they will provide training to improve small industry to be export-oriented. The number of companies given such facility in 2013 was 275. This year, the target of participants is 120.

However, oil fuel consumption is still a threat in terms of imports. Director of Oil and Gas program of Energy and Mineral Resources Ministry, Naryanto Wagimin, said that the government will still be importing fuel in a large amount.

He specified that to supply 48 million kiloliters of fuel, the government will import 24 million kiloliters of crude oil. “The high amount of oil export will affect the current trade balance deficit,” he said to Tempo.

Naryanto admitted that the government is having difficulties to reduce imports of oil, because fuel consumption control is related to the performance of other business sectors, such as manufacturing, transportation, and mining. The most feasible way to reduce import is to diversify energy through biodiesel utilization. “However, it is not enough to reduce [oil] import.”

ANANDA PUTRI | PINGIT ARIA | AYU PRIMA SANDI