KSP Calls Indonesia Has Big Capital To Guard The Trade Balance

Illustration (Photo: Doc. Antara)

JAKARTA - Main Expert Staff of the Presidential Staff Office (KSP) Agung Krisdiyanto said Indonesia still has big capital and opportunities to keep the trade balance growing amid global uncertainty through increasing industrial downstreaming.

In the statement received in Jakarta, Wednesday, Agung conveyed the downstream policy, which is one of President Joko Widodo's priority agendas, to improve the domestic industrial ecosystem and maintain the development of Indonesia's trade balance in the long term.

"The results are already there. During 2022, downstream nickel commodity has succeeded in increasing the export value of nickel and its derivative is 365 percent year on year (yoy)," Agung said as quoted by Antara, Wednesday, January 18.

He also saw that Indonesia could diversify exports to non-traditional countries, especially those that already had trade agreements with low-rate schemes.

So far, Indonesia has trade agreements, both regional and bilateral, with ASEAN, Japan, Pakistan, Chile, United Arab Emirates (UAE), Mozambique, Australia, and South Korea.

In addition, Indonesia is also conducting trade negotiations with the European Union or the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU CPA) which is expected to be completed by the end of 2023.

"KSP will oversee and take de-bottletracking steps so that an agreement can be reached immediately," explained Agung.

On the import side, he continued, the government is trying to suppress imports through government goods and services procurement instruments by prioritizing domestic products.

This commitment is contained in Presidential Instruction Number 2 of 2022 concerning the Acceleration of Increasing Use of Domestic Products and Micro Business Products, Small Businesses, and Cooperatives in order to make the National Movement Proud to be Made in Indonesia a success.

Agung emphasized that Indonesia's current condition is still much better than other countries, especially since Indonesia's economic condition is dominated by domestic markets than international markets.

So, according to him, global influence can be circumvented with an award looking policy or a domestic market utilization strategy to increase economic growth.

He also ensured that Indonesia's foreign exchange reserves, which ranged from 137 billion US dollars, were still safe enough to finance imports for six months.

This can provide a strong enough cushion to maintain the stability of the rupiah exchange rate which is thought to be experiencing turmoil due to the increase in the Fed interest rate.

"Business people still have to be vigilant, but don't panic and worry, Indonesia's economic condition is still much better," said Agung.

As is known, during 2022, Indonesia's trade balance recorded a surplus of US$54.46 billion with an increase of 53.7 percent yoy.

Referring to monthly data since May 2020, Indonesia recorded a trade balance surplus for 32 consecutive months.

However, various groups think that this achievement will not be repeated in 2023 due to global uncertainty.