Tuesday, January 10, 2006

Indonesia's trade balance: What's wrong?

Early last week, Indonesia's Central Bureau of Statistic (BPS) announced the country's 18.98% export growth in the period of January-November 2005 against the same period in 2004. That's good!
Import grew 26.8% in the period, however, to make the overall trade balance a surplus of around US$4.6 billion. Not bad!
But when we look deeper into the numbers, Indonesia's trade performance is not as good as it seems. Look at the oil and gas sector. Oil and gas export, contributed around 22.5% of Indonesia's export, grew by 21.53% to US$17.38 billion. Import on this particular sector, however, jumped 52.59% to US$16.07 billion. Yes the country still booked positive balance of US$1.3 billion. But the surplus has been shrinked from US$3.8 billion in January-November 2004.
Natural gas export saved the day with net balance of US$8.2 billion. But the oil balance is worrysome. Indonesia's oil export revenue was only US$9 billion, while its import reached US$16 billion, leaving the country in a negative balance of US$7 billion in oil products. The reason is clear. Indonesia's oil output has been stagnant at slightly below 1 million barrels per day, dropped from around 1.4 million bpd few years back, while domestic consumption has grown to around 1.4 million bpd.
The non-oil and gas trade balance is also in trouble. It is true that non-oil and gas booked trade surplus of US$23.3 billion in the January-November 2005, increased significantly from US$19.3 billion in the same period 2004.
But it was not a result of better competitiveness of manufacturing sector. It was mainly a result of higher energy price. Coal export revenue, classified as non-oil and gas product, grew 176% in the January-November 2005 to US$4.16 billion. Mining products also booked export revenue of US$2.96 billion, jumped 181%.
Crude palm oil was also the major contributor for the country's trade surplus with total export of US$4.39 billion. Other agriculture product, rubber, is the second largest with US$3.14 billion. That's it. Electronics were doing good with total export of US$6.66 billion. But don't expect good news from textiles, shoes, automotive, steel, chemicals, plastics, or other manufactured products. Indonesia clearly needs to revive those sectors immediately.

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Anonymous Anonymous said...

How about agricultural products?
the ones that V.O.C used to sell in the old days..

January 17, 2006 11:13 PM  

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