The Indonesian Employers Association (Apindo) proposes two strategies to boost Indonesia’s export performance in 2017: (1) seek new export markets and (2) export ‘halal’ products (which adhere to Islamic law) to the Middle East. Last week Indonesia’s Trade Ministry revised down its export target for 2017. The Ministry now expects Indonesia’s export performance to grow 5.6 percent (y/y) to USD $136 billion this year (from an estimated USD $129 billion in 2016). The revision makes the nation’s export target in line with the slow recovery of international demand.
Chris Kanter, Vice Chairman at Apindo, said his institution agrees with the new export target of the government (earlier the government targeted a highly unrealistic 11.9 percent y/y growth of exports in 2017). However, Apindo requests the government to undertake more efforts to achieve the new (downward revised) target. Firstly, by seeking new export markets. Currently, the (traditional) key export destinations for Indonesia’s (non-oil & gas) exports are the United States, China, and Europe. Besides these traditional export markets, there should be a focus on new export destinations. For example, South Africa, Nigeria and Angola are candidates according to Kanter.
Secondly, the Middle East forms a great potential for the export of halal products because populations in this region are nearly all Muslim. Indonesia already has a large and diverse amount of domestically-produced halal products, particularly halal food and drinks (manufactured by Indonesia’s medium-sized enterprises). These products should find their way to the Middle East.
Kanter added that Indonesian manufacturers also need to improve the quality of their products. Global demand for Indonesian furniture, textiles, and footwear should rise strongly provided Indonesia’s domestic manufacturers manage to enhance the quality of their output.
Meanwhile, Shinta Kamdani, Deputy Chairman of International Relations at Indonesia’s Chamber of Commerce (Kadin Indonesia), agrees with Kanter and says Indonesia can achieve the 5.6 percent (y/y) export growth target (non-oil & gas) if local exporters manage to improve the quality of their products. Moreover, Indonesian manufacturers need to focus on innovative products in order to attract foreign demand.