Trade Ministry Continues to Maintain Domestic and Global Market Supply

Jakarta, InfoPublik—Trade Minister Agus Suparmanto emphasized that at the remaining of year 2020, the Ministry is developing better trade strategies for the coming year.

In its efforts to restore the economy, Trade Ministry will focus on maintaining domestic consumption and markets by continuing the Bangga Buatan Indonesia (Proud of Indonesian Products  program), as well as increasing Indonesia's involvement in the global supply chain.

"The end of 2020 is the right momentum for us to learn and develop a better trading strategy in the coming year. As a large country, maintaining domestic consumption and markets is one of the appropriate measures to support Indonesia's economic recovery. On the other hand, Indonesia's openness and involvement in the global supply chain are also imperative,” said Trade Minister Agus, Sunday (29/11).

Agus continued that among the measures to be taken are maintaining the main market and continuing to open new market access in non-traditional countries to increase competitiveness and globalize Indonesian products.

Such measures are important to prepare the country to be ready to race in the world trade, especially amidst the uncertainty caused by the Covid-19 pandemic.

The world trade is also experiencing a slowdown due to the pandemic. The IMF said that world trade in 2020 is estimated to contract by 10.4 percent. However, in 2021, world trade is expected to improve and grow by 8.3 percent with the largest contribution from developing countries. For this reason, Agus considered that the current new normal situation a transitional process that required all countries to quickly adapt and innovate. The Covid-19 pandemic has changed various orders, including in the world trade and business sector, starting from the production system, superior commodities, to the logistics system.

"We must be able to turn the momentum of this crisis into a leap of opportunity and progress. To that end, the Trade Ministry has mapped the challenges and opportunities in the trade sector during and after the Covid-19 pandemic,” said Trade Minister.

The challenges currently being faced in the trade sector include, among others, changes in consumer behavior and global trade patterns, trade protectionism and rising trade barriers, trade cooperation between countries, and potential trade balance deficits and economic recession.

Meanwhile, trade opportunities that must be exploited are the growth in trade value for new potential products, relocation of global industrial and investment centers, digital transformation and the increasingly massive development of information technology, and utilization of market potential in potential areas.

"By looking at the various challenges and opportunities, the Trade Ministry has and will continue to carry out various strategic steps and periodic evaluations to support the national economic recovery program," continued the Trade Minister.

Agus also explained that several strategic policy responses from the Ministry include temporary ban of imports of live animals from China which have been carried out since February 2020; budget reallocation and refocusing, including assistance programs for public markets and MSMEs; non-fiscal economic stimulus; securing the availability of medical equipment, such as masks and personal protective equipment (PPE), and stabilizing prices and guaranteeing staple stock.

Apart from that, the Ministry also carries out a strategy to monitor circulating goods and/or services in online trading (e-commerce); increased export facilitation; secure industrial raw materials, including imports of raw materials such as sugar, which is much needed by food MSMEs; regulation of imports of consumer goods; use of international trade cooperation forums; as well as the gradual opening of trade facilities in the new normal era. The Trade Ministry has also developed a strategy to accelerate trade growth for the domestic market and the global market.

In terms of efforts to increase non-oil and gas exports in particular, the Trade Ministry has also developed short and medium term strategies. The short-term strategy is oriented towards a product approach and a market approach, while the medium-term strategy is carried out through mapping of Indonesian products in already strong accredited countries. In addition, the Government continues to pursue trade agreements through international trade cooperation agreements.

To date, Indonesia has completed 21 trade negotiations, both bilaterally and multilaterally and regionally, including the RCEP which was signed on 15 November  2020.

Trade Minister added that despite the economic slowdown and the Covid-19 pandemic, trade balance performance is still in good condition. Trade balance deficit only occurred in January and April. In the May-October 2020 period, Indonesia's trade surplus had an increasing trend. Cumulatively, the trade balance for January - October 2020 reached US$17.1 billion, exceeding Indonesia's trade balance for the entire 2017 and is the highest achievement since 2012. (reporter: Wandi, translator: Penni P. Rusman)