Our Utterly Poor Exports

Posted by AsiaViews | Feb 5, 2018 | 0 |

INDONESIA

The Jakarta Post

2 Feb 2018

We can understand President Joko “Jokowi” Widodo’s disappointment about Indonesia’s export performance, which though increased by 16.22 percent in 2017 was utterly poor compared to other, much smaller ASEAN countries. Our total exports of only US$169 billion in 2017 pale compared to the $214 billion earned by Vietnam, which started building its economy only in the late 1970s, let alone to the more than $230 billion each booked by both Thailand and Malaysia.

Yet more discouraging is the fact that, even though more than 75 percent of our exports are categorized as manufactured goods, most of them — such as palm oil, cocoa and coffee beans and crumb rubber — are products with low added value. Take, for example, palm oil exports, which rose to $23 billion last year. Most of these exports are crude palm oil, a product of low added value.

The President’s so open an expression of disillusionment at the Trade Ministry’s working conference on Wednesday should rudely jolt the trade minister to critically reevaluate the export promotion programs in traditional and new markets and to realign the location of Indonesia’s trade promotion centers overseas to tap new markets.

But we should not blame the poor export performance solely on the acute lack of well-designed promotion overseas. Trade Minister Enggartiasto Lukita, like his predecessors, has been overwhelmed with the politically sensitive task of maintaining price stability and the smooth distribution of basic staples to help check inflation.

This task alone has forced him to always conduct a balancing act between fulfilling the need for imports to cover any deficit in the basic necessities and maintain price stability and the interests of farmers in getting fair prices for their products.

Hence, besides improving overseas promotion, the government also should step up efforts to strengthen the competitiveness of our exports by reducing logistics costs and lowering bank lending rates, which are among the highest in the ASEAN region. Exporting manufacturers need credits at the pre-shipment stage to allow them to procure raw materials, cover their processing costs and pay for the packing, freight and insurance for export operations.

In fact, the operations of our exporting manufacturers involve a wide range of cross-sectoral activities: import of inputs, port handling, transportation to processing plants and shipment. Any hurdle at one of these points of activity can adversely affect the competitiveness of exports due either to delayed delivery or increased costs.

The Jokowi administration has set the right top priority programs for accelerating infrastructure development to improve connectivity within the country and between the country and the international market. Sixteen reform packages have also been launched to improve the ease of doing business and slash transaction costs.

But we still need a higher pace of progress with these reforms to make seaport handling, land transport services and customs clearance much more efficient. Cumbersome customs clearance, for example, delays the release of imports, while the manufacturing sector depends mainly on imported basic and intermediate materials, components and parts.

(First published in The Jakarta Post – http://www.thejakartapost.com/academia/2018/02/02/editorial-our-utterly-poor-exports.html)

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POINTS TO PONDER

EXTRICATING NDONESIAN CHILDREN FROM ISIS INFLUENCE ABROAD

Indonesia urgently needs to revisit the possibility of repatriating the neediest of its young citizens stranded abroad, whose families had earlier joined ISIS. Most of these children are in camps in northern Syria but there are also small numbers in the Philippines, Afghanistan and Iraq. “Extricating Indonesian Children from ISIS Influence Abroad”, the latest report from the Institute for Policy Analysis of Conflict (IPAC) argues that the government could begin by bringing back small groups of unaccompanied children under ten years of age, who pose minimal security risk and are most vulnerable to deteriorating conditions in the camps.“The problem is that health and security conditions are worsening by the day in the Syrian camps, and the children are growing older,” says Dyah Kartika, IPAC analyst. “They need access to schools, a nurturing environment, and medical attention. If the government waits too long, the children will be further exposed to ISIS ideology.” The new report examines a 2019 list of Indonesians in camps and prisons run by the Kurdish Syrian Democratic Forces (SDF). The Indonesian government has been trying to verify their citizenship, but with pseudonyms, misspellings and bad transliterations, it is a daunting task. At the time the data was collected, between March and June 2019, there were 555 Indonesians in SDF camps and prisons, including 367 children. Among the children, approximately 277 were under the age of ten and 34 were unaccompanied. In June 2021, there are fewer than ten children who are both unaccompanied and under the age of ten that could be prioritized for return. Bringing back children of ISIS families is no easy task. The report analyses the main challenges faced by the Indonesian government. These include definitional issues, bureaucratic competition, the difficulty of verifying nationality, evaluating the toll of exposure to conflict, assessing security risk, and finding relatives or others willing to provide care once the children are returned. In addition, COVID has meant stringent restrictions on travel, placing further obstacles in the way of repatriation. There are several models for rehabilitation of children exposed to violent extremism in Indonesia that could be modified to accommodate the needs of children repatriated from abroad. The report examines these models and argues that the government does not need to have every detail of rehabilitation programs in place before it starts extricating children from ISIS influence. It can start by bringing back the most vulnerable children and then modify programs as needed.

“It’s important that the government see these children as victims” says Dyah. “They deserve a chance to be children again.”

Our Utterly Poor Exports