Saturday, March 12, 2011

Indonesia's Export to Japan May be Disrupted

A 8.9-magnitude earthquake that rocked Japan and unleashed a 10-meter high tsunami may have the potential of affecting Indonesia’s exports to Japan, an official said.

"So exporters, importers and business world alike should be patient or switch to new markets other than Japan," Edy Putra Irawady, deputy for industry and trade to the coordinating minister for economic affairs, said here on Friday.

The natural disaster might also indirectly affect the domestic economy. He said two-way trade between Japan and Indonesia might be disrupted and Japanese investment in Indonesia might decline.

Meanwhile, Chief of the Banking Affairs of the Indonesian Young Businessmen Association (HIPMI) Silmy Karim said the disaster might affect the domestic economy now that Japan was one of Indonesia’s main export destinations. He said the Japanese companies which had so far imported part of their raw materials from Indonesia were expected to reduce their imports.

"Our alumunium and gas exports to Japan will likely fall sharply but such is not the case with CPO and coal exports," he said. He predicted the Japanese economy would soon recover from the disaster although its impact on the Japanese economy would be felt in three to six months’ time thanks to the country’s experience in facing such difficult situation.

Acting Chief of the Fiscal Policy Board (BKF) at the Finance Ministry Bambang Brodjonegoro expressed hope the disaster would have no prolonged impact particularly on the Indonesian economy.

"Japan is relatively more prepared (than any other nations) to deal with the impact of disasters so Friday’s quake and tsunami will likely have a relatively small impact on its economy," he said.

Last year, Indonesia’s non-oil/non-gas exports to Japan hit a record high of US$16.49 billion, making it the biggest market for Indonesia’s exports. In January 2011 alone, Indonesia’s non-oil/non-gas exports to Japan reached US$1.21 billion, accounting for 10.13 percent of its overall non-oil/gas exports in that month.

source: .kompas.com / picture: google.com

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