Indonesia - Targeting Non-Traditional Markets The Ministry Of Trade Encourages Entrepreneurs To Explore The South American Market

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1. PRESS RELEASE Public Relation Bureau Building I 2nd Fl , Jl. M.I Ridwan Rais No. 5, Jakarta 10110 Phone: 021-3860371/Fax: 021-3508711 www.kemendag.go.id Targeting Non-Traditional Markets, The Ministry of Trade Encourages Entrepreneurs to Explore the South American Market Bandung, 2 June 2016 – The Ministry of Trade encourages entrepreneurs to target non-traditional export destination countries (emerging markets) besides focusing on the traditional export destination countries in order to boost the increase of non-oil and gas exports. Indonesia has begun encouraging entrepreneurs to explore South American market in addition to Central Europe and Africa. This was asserted by the Acting Director General of Foreign Trade, Karyanto Suprih, at the Meeting Forum of West Java’s Exporters themed “Seizing South American Market to Increase the Value of Indonesian Non-oil and gas Exports,” in Bandung, West Java, Thursday (2/6). “The South American Region holds huge potential as a market for Indonesian products, yet Indonesia’s trade value to the region is still considered low. The goods that have major potential are textile products, automotive products, and agricultural products,” said Karyanto. Throughout 2015, Indonesia’s export value to countries in the South America region was recorded as very low. The total value of Indonesian exports amounted to USD 2 billion 99% of which are exports of non-oil and gas products. The main export destination countries include Brazil, Argentina, and Peru. Karyanto said that the number is very low compared to the existing potential. Meanwhile, according to Karyanto, the potential for South American market is open wide with 387 million citizens and above USD 11,000 per capita income. The economic growth of South America is not significantly influenced by the economic crisis in Europe, and South America has a middleclass of more than 100 million people. “With a relatively good economy, the consumption pattern of the middle class can be further encouraged leading to creation of good opportunities to penetrate the market,” continued Karyanto. The countries with high economic growth are Argentina, Ecuador, and Peru with growth above 6,5%. South American countries with the biggest middle class today are Uruguay (56%) and Argentina (53%) while Bolivia (13%) and Paraguay (19%) are the countries that have the least middle class in South America. Karyanto revealed several reasons which caused Indonesian trade to the region to be so low, namely because exporters still consider South America’s location to be too far, the profits are yet to be predicted, and South America is still not within the promotion structure. Beside that, the products are produced are not customer oriented. Therefore, Karyanto expected producers to be
2. able to innovate and be creative in creating products that are favored by the South American market . The Exporters’ Meeting Forum held by the Directorate General of Foreign Trade’s Directorate of Export and Import Facilitation was attended by 100 participants comprising exporters, SMEs, Regional Indonesian Chamber of Commerce and Industry, associations, academics, and government institutions in West Java. The speakers of the forum were the Ministry of Trade’s Representative from the Center of Foreign Trade Policy, Kasan Muhri; the former Derputy Director of the Indonesian Trade Promotion Center (ITPC) Sao Paolo, Bayu Setiawan; the Head of ExporterImporter Association, Amalia, and the Director of PT Asuransi ASEI, Badruz Zaman. On the occasion, Karyanto also appealed to the exporters who want to enter South American market to find information through Indonesian Representatives abroad, such as Trade Attachés or Indonesian Trade Promotion Centers (ITPC) in order to make the penetration of non-traditional markets a success. Another measure that can be taken to support exporters in maximizing the South American market is utilizing trade financing in Indonesia. Karyanto said that a trade-financing scheme is very important for Indonesian industries in increasing the competitiveness of their export products. “The purpose of national export financing is to accelerate the growth rate of Indonesia’s foreign trade and to increase the competitiveness of entrepreneurs while at the same time supporting government policies in order to promote the national export increase program,” said Karyanto. Individuals residing within or outside of the country as well as incorporated or unincorporated businesses will be able to get export financing from the Export Insurance and Financing Institutions. These finance institutions can provide financing, insurance, and consultation services for national exporters. “If exports to the non-traditional regions such as South America can be increased, it would be of great significance for the Government’s efforts to increase the non-oil and gas export value,” said Karyanto. --end-For further information please contact: Luther Palimbong Head of the Public Relations Bureau Ministry of Trade Phone/Fax: 021-3860371/021-3508711 Email: pusathumas@kemendag.go.id Nusa Eka Director of Export and Import Facility Directorate General of Foreign Trade Ministry of Trade Phone/Fax: 021- 3450071/021- 3450071 Email: nusa.eka@kemendag.go.id