Why Our Trade Balance Is Always Fluctuative 

By : Bambang Sabekti, professional in shipping  and maritime industry.

As we are aware, President Joko Widodo  has reminded his ministers for many times  to increase export and foreign direct investment (FDI) by simplifying  and speed up its permits process. But, apparently , what president expected was never happened up to now and we didn’t see any improvement from these sectors. In view of it, President Jokowi then planned  to  set up a new ministry with main task on is focusing to boost the export from Indonesia and improve FDI. Another option is giving additional task relating international trade to the Ministry of Foreign Affairs.

Currently, there is evidence to say that Indonesia couldn’t take advantage from trade war between US and China, unlike other countries that take advantage through increase of export volume. Vietnam, for example, enjoyed a significant increase of export to USS, by around 30%. Indonesia on the other hand is still suffering a trade deficit (red zona).

In 2018 for example, Indonesia suffered trade deficit of US$6.18 billion, putting it approaching the red zona.  Indonesia’s monthly trade balance were mostly negative a long the year, except for the months of March, June, and September that experieced surplus. In other words, in 2018 our import was much more than export.

The trade deficit is still continuing in 2019. In January we faced were deficit by US$ 1,16 billions, and April by US$ 2,5 billions . Year to date (YTD) August 2019, according to BPS, Indonesia sufferer deficit by US$ 1,811 billion in total, though the August itself enjoyed a surplus by US$  85 million, thanks to the surplus of on non-oil/gas export.

One  of reason why the August trade was surplus was because of the drop of import of waste paper (containerized cargoes), (particularly in Jakarta and Surabaya), following the issuance of revised regulations on the import wastepaper to Indonesia.

This revision refers to the procedure of verification method of waste paper at orgin (loading port)i.e: (1) Cargo inspection to be done at origin before stuffing, when all cargoes and containers are 100% made available for inspections, (2) Surveyor will check 2 ( two) bales randomly per container to ascertain that waste paper conditions is clear , dry and homogenous, (3) Loading/Stuffing supervision is carried out out 100% on all goods loaded into container and sealed by Surveyor’s seal.

KSO Sucofindo and Surveyor Indonesia is the surveyor company appointed by Indonesia Government to implement this new procedure, (3) Shipper to confirm that inspection at origin side has been done and approved by one of the appointed KSO agents , i.e: Cotena for North America, USA and Canada; CMW Survey and Inspection for Continental Europe and Russsia (excluding UK and Baltic); Baltic Control for UK/Ireland, Baltic and Latin/South America; Bureau Veritas for Africa Zone, including La Reunion; CCIC for China, Mexico, and other Asian countries, Alex Stewart for Australia and OMIC for Japan.

This regulation revision was to make sure that shipper at country of origin does not send the garbage cargo to Indonesia and they need to re-export again that happened in Jakarta, Surabaya and Batam in  few months ago.

But in general, our international trade growth is growing just flat. The international trade volume for at the leading port of Tanjung Priok for example grew up very slow. According to data, up to September, Tanjung Prio year on year (YTD Sept) international trade grew up by less than 1 (one) percent.

This was challenging for terminal and shpping busnisess in Tanjung Priok. The supply is more than demand. Cost for doing business is increasing, while revenue is just steady, even tend to decrease, causing business margin become fewer and fewer.

It also took place at the second Indonesia’s leading port of Tanjung Perak Surabaya. Tanjung Perak gate way for international trade TPS also faced slow growth. It is true Teluk Lamong may take over some of the TPS market. But, in general, the volume grew up slow.  This year we didn’t experience to have peak season on shipment during Idul Fitri.

Other factors are the impact of Trade war between US and China and political year in Indonesia ( President and DPR elections ). In addition this year and next year the econimoic growth is not in favourable level and only will grow more less on 5%. It is below than APBN target.

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