JAKARTA: President Joko Widodo’s visit to Europe shows the government’s concern over declining European Union (EU) trade with Indonesia. Experts have argued that this decline is due to product mismatch.
According to data from the Central Statistics Agency (BPS), Indonesia’s exports to Europe decreased by 5.6 percent annually over the last five years. The slump in trade in 2015 hit 11.74 percent, while the balance of trade dropped by 12.9 percent.
“It is because the European market demands products, while we still depend on commodities,” said Institute for Development of Economics and Finance (INDEF) director Enny Sri Hartati to thejakartapost.com on Monday.
She said there was high demand for handicraft products like wood carving and jewelry. “We registered exports of US$973 million to France in 2015 and 43 percent of it was jewelry,” she said.
She blamed Indonesian trade attaches for not actively seeking and delivering trade information to help Indonesian traders improve their export performance.
“Foreign trade attaches are really active in Indonesia. They even come to us, analysts and economists, every month to dig out information,” she said.
In 2015, total Indonesian trade with EU members amounted to $26.1 billion with a trade surplus of $3.5 billion. Germany is Indonesia’s biggest trade partner, with trade worth $6.1 billion, followed by the Netherlands with $4.2 billion in trade.
“The EU is still a good market despite economic sluggishness in Europe. There are opportunities, especially in Eastern Europe,” economist Faisal Basri said.
