Textile Exports Drop, Economists Offer Solutions to Save the Country from the 2023 Recession

BULETIN TEKSTIL.COM/Jakarta -Director of the Center of Economics and Law Studies (Celios), Bhima Yudhistira, said that the 30 percent decline in Indonesian textile exports was due to reduced purchasing power in the United States and European markets.

He said a number of steps can be taken by the government and Indonesian textile exporters so that the industry can be saved from the threat of a global recession in 2023.

First, Indonesia must quickly seek new potential export markets. The government also needs to move faster using trade attaches or chamber of commerce representatives in North African and Middle Eastern countries.

Previously, Trade Minister Zulkifli Hasan said he would invade new export markets such as Africa, Eastern Europe, South Asia, Central Asia, and the Middle East.

However, according to Bhima, this is not an easy step because there are already many competitors from Indonesia, namely Vietnam, Bangladesh, and even from Eutopia (starting to dominate).

Bhima hopes that the government will compete faster with other textile exporting countries. Moreover, economic growth in the Middle East and North Africa has now reached 5.5 percent based on data from the International Monetary Fund (IMF) 2022.

Although it is predicted to slow down next year at around 3 percent, the two regions’ economies are still growing positively.

On the other hand, the transfer of the Indonesian market depends on international brands since the profile of the textile industry in Indonesia is still largely outsourced from international brands.

Therefore, he suggested that exporters and the government should communicate with the international brands so that they continue to choose Indonesia as their production base.

Bhima suggested that exporters should make some adjustments, particularly with regard to the ingredients and tastes of African and Middle Eastern consumers.

This is because the quality and tastes of consumers in Africa and the Middle East are very different from those in Europe and the United States.

“Other things that need attention are also the color and type of fabric, there are special characters,” he said.

According to Bhima, the government’s efforts to expand the export market must be followed by the provision of relaxation and efforts to prevent termination of employment or layoffs.

For example, increasing wage subsidies for the textile sector or tax incentives.

In addition, the government must control imports of textiles and apparel. Local textile producers are getting tougher because they have to compete with imported products. Indonesia with a high population is a big market but local entrepreneurs can’t enjoy it because they can’t compete.

Causes of Indonesia’s Export Import Decline in September 2022, Kadin Said

The Central Statistics Agency (BPS) noted that Indonesia’s goods trade balance in September 2022 experienced a surplus of US$ 4.99 billion. Despite the surplus, Indonesia’s export-import performance is still slowing.

The value of Indonesia’s exports in September 2022 decreased by 10.99 percent compared to August 2022. Last month, Indonesia’s total exports only reached 24.80 billion US dollars.

The value of imports in September 2022 also decreased by 10.58 percent compared to August 2022. The value of imports in September was only US$ 19.81 billion.

According to a member of the Indonesian Chamber of Commerce and Industry (Kadin) for Monetary Policy and Financial Services, Ajib Hamdani, Indonesia’s exports and imports are slowing because global economic activity is experiencing a general contraction.

Ajib said the export-import slowdown was also due to the government’s focus on economic transformation by doing more downstream processing.

According to him, in the long term, it this will strengthen the national economy. “But in the short term it will create a contraction of import-export activities,” he concluded.

(Red B-Teks/Ly)

Views: 25