Indonesian Govt Facing Challenges in Boosting Exports

Bisnis, JAKARTA - The government's efforts to bolster exports in recent years have been hindered by the unethical conduct of exporters who exploited state financing.
On July 19, 2023, the Ministry of Trade introduced a new policy aimed at bolstering the country's export performance. Two Minister of Trade Regulations were simultaneously issued: Minister of Trade (MOT) Regulation No. 22/2023 regarding Prohibited Goods for Export and MOT Regulation No. 23/2023 regarding Export Policies and Provisions.
The government introduced this policy to streamline export requirements, aiming to enhance the export of domestic products to global markets following the Covid-19 pandemic from 2020 to 2022.
Indonesia's export performance faced challenges during the pandemic, but surplus records were still attained, supported by a commodity boom. Consequently, the government implemented relaxations to sustain a trade surplus.
Under MOT Regulation 23/2023, the government has streamlined the export requirements for obtaining permits to export swallow's nests. Now, the sole requirement for these commodities is an independent statement.
Previously, the Ministry of Trade mandated quarantine before export. However, under the new regulation, quarantine is only necessary if demanded by the importing country.
Additionally, the government has revised the deadline for several mining products, including copper, laterite iron, lead, zinc, and anode mud, which were previously allowed for export until June 10, 2023. This deadline has been extended to May 31, 2024.
Furthermore, there's an extension of the export relaxation for forestry/wood industry products, allowing a cross-sectional area of up to 15,000 mm from August 1, 2023, to July 31, 2024. This will revert to a cross-sectional area of 10,000 mm2 on August 1, 2024. This adjustment aims to attract the interest of new importers.
In mineral products, this policy also entails the reclassification of several mining products from metallic minerals to non-metallic minerals, specifically rutile and ilmenite. This adjustment enables these commodities to be eligible for re-export.
We anticipate that the implementation of the new policy will have the potential to bolster Indonesia's exports," remarked Director General of Foreign Trade Budi Santoso (31/8/2023).
Meanwhile, according to the Central Statistics Agency (BPS), Indonesia's trade balance in 2023 registered a surplus of $36.93 billion. This figure marked a decrease from the surplus recorded in 2022, which stood at $54.46 billion. However, it represented a slight uptick from the surplus of $35.42 billion recorded in 2021.
Less than a year after the implementation of this policy, four exporters have been implicated in a suspected case of export financing fraud involving the Indonesian Export Financing Agency (LPEI) amounting to IDR 2.5 trillion. These companies operate in the palm oil, coal, nickel, and shipping sectors.