The government is aiming to increase the value of its export to Taiwan to US$10 billion annually, from a current $7 billion, in three years as part of efforts to lower the current-account deficit, according to a government official.
Deputy Trade Minister Bayu Krisnamurthi said Taiwan was a large potential market for Indonesian products.
Last year, Indonesia saw a surplus in its trade with the East Asian island nation.
“Last year, we saw a $2 billion surplus in our trade with Taiwan. This year, up until the next three years, we are looking to further increase our exports to Taiwan,” Bayu told reporters on the sidelines of a seminar on Monday.
Bayu went on to say that by increasing exports to Taiwan the trade surplus with the country could increase to $4 billion in three years’ time.
According to the deputy minister, during his visit to Taiwan last week, the Taiwanese government and local businesspeople requested Indonesia increase exports of several products.
“Their main request from us is to increase exports in furniture, mainly pieces made of solid wood; Indonesian specialty coffee; lifestyle products, such as home decor and fashion products; and consumer products such as instant noodles, chili sauce and soy sauce,” he said.
According to Bayu, Taiwan had one of Asia’s largest per capita gross national incomes (GNI) based on purchasing power parity (PPP), higher than several other developed Asian countries such as South Korea and Japan.
“Taiwan’s GNI per capita at PPP is about $39,000 to $40,000. Also, there are about 220,000 Indonesian nationals in Taiwan who are either migrant workers or students,” he said.
“This is why we have decided to make Taiwan one of our main focuses this year. Taiwan is a friendly and safe market with high purchasing power.”
Aside from increasing exports, Bayu said that several Taiwanese companies had expressed interest in investing in Indonesia.
He declined to give specifics, saying only that discussions were still underway.
Based on data provided by the Central Statistics Agency (BPS), Indonesian non-oil and gas exports to Taiwan in 2013 were $3.73 billion.
Meanwhile, Taiwan’s realized investment in Indonesia as of 2012 according to the Investment Coordinating Board (BKPM) reached up to $646.9 million.
Last year, Indonesia’s economy was troubled by a swelling current-account deficit, which reached 4.4 percent of the country’s gross domestic product (GDP) in the second quarter as a result of rising imports and slowing global demand.
Since then, the country has been working to narrow the current-account deficit through trade policy, increased interest rates and new sources of investment.
In February, the country’s efforts seemed to have paid off as it recorded a surprise trade surplus of $785.3 million, which helped cut the overall deficit in the first two months of the year to $354.7 million.
Source : The Jakarta Post | April 22, 2014