Recovery Seen As Indonesian Exports Hit A Record High

Jakarta Globe, Irvan Tisnabudi & Ardian Wibisono, February 02, 2010

A worker passing a pile of containers at Jakarta's Tanjung Priok Port, Jakarta, Monday. (JG Photo/Safir Makki)

Indonesian exports hit an all-time monthly high of $13.3 billion in December as commodity prices rose in line with the global economic recovery, the Central Statistics Agency said on Monday.

“We’ve never achieved a monthly figure of more than $13 billion,” said Rusman Heriawan, the chairman of the agency, known as the BPS. “The highest figure before this was $12.9 billion in May 2008.”

Exports in December jumped 23.9 percent from November and a dramatic 49.8 percent from December 2008, when they plunged 20 percent after the outbreak of the global financial crisis.

Full-year 2009 exports still fell 15 percent to $116.49 billion.

Rusman said exports of key commodities boosted December’s figure. Shipments of crude palm oil increased by $1.1 billion month-on-month, copper rose $284 million and coal exports went up by $268 million. “This is a sign of the global economic recovery,” he said. “Our exports staged a turnaround in the fourth quarter of the year.”

Japan was the biggest buyer of non-oil and gas exports in December, taking $1.25 billion. China ranked second with $1.19 billion and the United States third with $1.04 billion.

December imports totaled $10.33 billion, a 17.2 percent increase from November.

Indonesia’s 2009 trade surplus totaled $19.63 billion, more than double the $7.82 billion in 2008.

Purbaya Yudhi Sadewa, chief economist at the state-run Danareksa Research Institute, said developed economies had recovered significantly in the fourth quarter of 2009. “The strong exports in the fourth quarter and in December showed that the recovery is not just in sentiment but is real,” Purbaya said.

The country’s non-service sector should take advantage of the strong demand created by the global recovery by increasing production, he said.

“Currently, I see that the banks’ intermediation function has not fully recovered. The country’s real [non-service] sector might not take advantage of the global situation if they can’t expand their businesses due to high interest rates applied by lenders,” he warned.

Helmi Arman, an economist at PT Bank Danamon, said the longer-term trend showed that export earnings would continue to rise, driven by demand for commodities such as coal, crude oil and palm oil.

“Such changes in the structure of exports could lessen any deterioration of the trade surplus going forward,” he said. “This is because the need for raw material imports bound for re-export will be lower, compared to if exports were mostly comprised of higher-value added goods, which have higher import content.”