ASEAN KEY DESTINATIONS
Govt to set up trading centers overseas
The government plans to set up a number of marketing and distribution centers overseas to help extensively market Indonesian products as part of an ambitious target to triple exports by 2019.
Around 10 marketing and distribution centers would be set up in locations that have bright prospects to serve as sales hubs, such as in China, in the Jebel Ali Free Zone (Jafza) in the United Arab Emirates and in the Varna Transit Trade Zone in Bulgaria, a Trade Ministry official said.
“There are at least five products that we will try to market from them, such as furniture, home decorations, jewelry, textiles and textile products and footwear,” the Trade Ministry’s director general for national export development, Nus Nuzulia Ishak, said recently.
Trade Minister Rachmat Gobel wanted to triple exports by 2019 from US$176.29 billion last year, the lowest level the country has seen in five years, which missed the official target of $184.4 billion.
One of the many strategies that would be implemented is to deploy all Indonesian trade attaches and representatives worldwide to work as marketers to boost the country’s exports. If they don’t perform well in that role they could lose their jobs.
The ambitious trade target was made amid a deterioration in the global economy that has eroded the price of Indonesia’s key commodities and slashed demand for its manufactured goods.
Meeting the target would be challenging, if not unrealistic, economists said, as the country’s exports depend heavily on commodities instead of on manufactured goods.
The government has also targeted non-oil and gas exports, the biggest contributor to overall exports, to hit $192 billion this year, up 31.5 percent on a yearly basis, amid a forecast from the World Trade Organization (WTO) that estimates a 5.3 percent growth in global trade.
Indonesia’s planned overseas marketing and distribution centers would be operated by experienced exporters under the guidance of representatives from International Trade Promotion Centers (ITPC) worldwide, Nus said.
In some centers, exporters would benefit from special facilities offered by their operators, she added. Jafza, for example, offers an “incubation facility” that allows small and medium enterprises (SMEs) to explore business prospects in the region at an affordable cost. The facility will be handed over to the designated state agency, which allocates spaces to the SMEs.
Indonesian business players could also take advantage of the tax free facility and the easier procedures for setting up businesses in Dubai provided by Jafza, the Trade Ministry’s director for market development and export information, Ari Satria, said.
“Dubai can serve as a trade hub. Our business people can establish a firm there and expand their business elsewhere from there,” he said.
Minister Rachmat earlier said that the government had considered developing trading houses, which facilitate transactions between a home country and foreign countries, to expand export destinations.
The ministry was assessing the possibility of appointing state-owned trading companies PT Sarinah and PT Perusahaan Perdagangan Indonesia (PPI) as the trading houses.
“The firms will help export our products to destinations that have been penetrated by our exporters,” Rachmat said, citing handicrafts, furniture, food and beverages as potential products distributed by the trading houses.
It remains unclear whether the trading houses will be similar to general trading companies, which have succeeded to assist countries like South Korea to boost exports.
In the 1960s, Korea pushed up its exports ten-fold in seven years with the facilitation of the general trading companies that integrated supply and demand and enabled its domestic business players to make the best use of global networks.
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