By: Wahyu Pratama )*
The performance of international trade plays an important role in maintaining the momentum of economic growth and competitiveness of the domestic economy. In the midst of the global economic recovery after the Covid-19 pandemic, Indonesia’s export performance still showed a significant increase.
Based on data from the Central Statistics Agency (BPS) total exports for the January-February 2022 period reached USD 39,637.7 million, an increase of 29.75% (yoy) compared to the January-February 2021 period which was recorded at USD 30,549.8 million. The increase in export value was influenced by increased trade in oil and gas and non-oil and gas commodities.
Oil and gas exports for the January-February 2022 period reached USD 1,896 million, an increase of 8.69% (yoy) compared to the January-February 2021 period which was recorded at USD 1,744.4 million. Meanwhile, non-oil and gas exports in the January-February 2022 period were USD 37,741.7 million, an increase of 30.77% (yoy) compared to the January-February 2021 period which was recorded at USD 28,805.4 million.
The momentum for increasing domestic export performance needs to be utilized by business actors to increase production capacity to process raw/raw materials into finished goods that have added value to meet export needs.
On the other hand, the Government must be smart in taking advantage of this momentum to push the economy towards a better direction, so as to increase the competitiveness of the domestic economy, especially for the Micro, Small and Medium Enterprises (MSMEs) and Processing Industries, because these sectors are very strategic in supporting employment. The increase in exports in these two sectors will certainly cause a multiplier effect which has an impact on increasing people’s purchasing power and accelerating economic growth.
The Minister of Finance, Sri Mulyani Indrawati, stated that the Government has given great attention to efforts to increase Indonesian exports through the Job Creation Act. The regulation provides ease of doing business for all businesses and supports MSME exports through the provision of funds through banking. These efforts were made to increase the competitiveness of the domestic economy. The MSME sector has an extraordinary role for the national economy. Plus this sector is also able to absorb and create job opportunities for the wider community. So it really becomes a serious concern for the Government.
The Indonesian government continues to negotiate a free trade agreement in connecting the Indonesian market with the world market. Of course, this is expected to provide opportunities for Indonesian export products, including MSMEs, to be able to penetrate the global market.
To support this, the Coordinating Minister for Economic Affairs Airlangga Hartarto has signed a Regional Comprehensive Economic Partnership (RCEP) agreement involving 15 countries. It is hoped that this RCEP agreement will encourage Indonesia to be more integrated into global value chains.
Indonesia is expected to be able to take advantage of the opportunities offered by RCEP with market access for Indonesian export products that are increasingly open, national industries will be increasingly integrated with regional production networks and increasingly involved in regional and global chains.
Researcher from the Economic Research Center of the Indonesian Institute of Sciences (LIPI) Zamroni Salim said, the Job Creation Act is the spearhead that needs to be optimized so that Indonesia can get out of the middle income trap. This regulation can simplify pre-employment licensing, so that it will advance Indonesia’s economic activities, especially in the fields of investment and international trade.
Along with the implementation of these policies, stakeholders must strive to encourage the performance of local processing industries that are able to process raw materials into products that have added value that can improve export performance.
Indonesia’s export performance continues to record positive growth even though the economy is still showing a recovery after the Covid-19 pandemic. For this reason, the Government needs to encourage export performance to increase economic acceleration and competitiveness of the domestic economy, by encouraging the performance of MSME actors and the processing industry.
)* The author is a Public Policy Observer
