REMARKS BY THE MINISTER OF TRADE OF THE REPUBLIC OF INDONESIA AT THE FUN BIKE PROGRAM OF THE MINISTRY TRADE AND THE COMMUNITY OF COMMODITY FUTURES AND THE WAREHOUSE RECEIPT SYSTEM JAKARTA, 8 OCTOBER 2011 Honorable Chairpersons and Members of Commission VI DPR RI; Honorable Vice Minister of Trade; Honorable Officials of Echelon I, Ministry Trade and staff; Honorable Board of Directors of PT. Bursa Berjangka Jakarta, PT. Bursa Komoditi dan Derivative Indonesia, PT. Kliring Berjangka Indonesia and PT. Identrust Security Indonesia; Honorable Board Of Directors of PT. Pertani, PT. Bhanda Ghara Reksa (BGR) and PT. Sucofindo as Management of the Warehouse for Warehouse Receipt System; Honorable Chairperson of the Indonesian Association of Futures Brokers (APBI) and the Chairperson of the Indonesian Association of Futures Companies (IPPBI); Honorable Management of BAKTI; Honorable Fellow Journalists and Ladies and Gentlemen, participants of this Fun Bike Program. Good morning and May Peace and Prosperity be upon us all, In this wonderful morning, let us praise God Almighty for we are able to gather here in good health and we are able to meet here for a special fun bike event to refresh our body and mind after our daily work in fulfilling our duties. This delightful fun bike program is part of celebrating the enactment of Law No. 9 of 2011 on the Amendment of Law No. 9 of 2006 on the Warehouse Receipt System and Law No. 10 of 2011 on Amendment of Law No. 32 of 1997 regarding Commodity Future Trading promulgated by the Parliament on 19 July 2011 and signed by the President of Indonesia in Augusts 2011. By amending these two Laws, these bills may serve to fulfill the demand of the market and support the development of commodity future trading and support the application of the Warehouse Receipt System in Indonesia, to further develop the national economy which is why we have chosen the theme for today s event that is Futures Trading and Warehouse Receipt taking an active role in driving Indonesia s Economy.
This program is also a concrete activity in implementing the 100% I love Indonesia (Aku Cinta Indonesia or ACI) program. ACI is a movement to promote the awareness, pride and appreciation towards Indonesian products. Like what we are doing today we show our appreciation by wearing T-shirts, shoes, and using Polygon bicycles entirely made by Indonesian hands and have been tested to meet the international standards. By promoting appreciation and pride towards Indonesian products, we will start buying and using Indonesian made products and create a larger market. I like the slogan of Indonesia Moving Forward, because there is positive energy and creativity towards a better Indonesia that thrives on its creation of quality and competitive products. Ladies and Gentlemen, As one of the major commodity producing countries of the world and as a major supplier of prime commodities of the world including agriculture products, plantation commodities and mining products that often have fluctuating prices, then it is certainly justified for Indonesia to have its own commodity trading house that is at level with other trading houses in the world. Having a trading House in Indonesia shall bring benefit for Indonesia s economy and its people particularly as a hedging for price fluctuation, and as a price discovery for determining the price and can serve as an alternative investment for business people. The positive indicators in the rapidly growing Prime Commodity Futures Trading in Indonesia have been apparent for the past two years. In 2009, the transaction volume was only 17,000 lots, but in 2010 the volume increased to 233,000 lots. In fact up to August 2011, the volume has reached 523,000 lots. Similarly, the development of the Warehouse Receipt System is also encouraging as indicated by the number of receipts issued that reached 263 Warehouse Receipts valuing Rp 37.03 billion and from that amount the Farmers Association has used the receipts as collateral for bank loans amounting to Rp 19.75 billion. In line with this development, the Ministry Trade has continuously made effort to support a positive business climate for Commodity Future Trading and Warehouse Receipt System in Indonesia, by providing the necessary legal framework to protect the interest of all the stakeholders. Ladies and Gentlemen, Allow me to brief you as players in the commodity future trading- on some highlights of Indonesia s Trade performance. For the period between January to August 2011, Indonesia s export volume amounted to US$ 134.8 billion, or increasing by 36.6% compared to the volume in the same period last year, which consist of non-oil/gas commodities amounting to US$ 107,4 billion (increasing by 31.4%) and oil/gas commodities
amounted to US$ 27.4 billion (increasing by 61.3%). If we observe the trend of nonoil/gas and oil/gas exports, the growth rate still exceeds 30 % which totals to a moving average annual growth rate of 33.8%. If we can maintain such growth rate of above 30% until the end of 2011, our total export may likely exceed US$ 200 billion. The growth of our total non-oil/gas commodity export in 2011 was contributed by diversifying the export market particularly to FTA partner countries and to other emerging markets. PRC was the main export destination for non-oil/gas commodities from Indonesia for the period between January to August 2011. The export of non-oil/gas commodities from Indonesia was mainly dominated by industrial goods. Between January to August 2011, the highest growth was in the industry sector that increased by 33.6%, from US$ 61.3 billion to US$ 81.9 billion. The 31.5% growth of export of non-oil/gas commodities between January to August 2011 was derived from the 25.2 % growth of industrial products that came from the growth of the mining sector (6%), and from the growth of the agriculture sector (0.2%). From the rise of the industrial commodity export, apparently Indonesia s industry is on the right track, aligned to the government program in up streaming the industry. From the import side, Indonesia s imports between the period of January to August 2011 is still dominated by the import of raw material/support material that has increased by 34.9% in the same period of last year, or with a value of US$ 86.1 billion. The import of capital goods has increased by 14.8% to US$ 20 billion. Meanwhile the import of consumption goods during January to August 2011 had increased by 34.8%, however this increase is less than the increase of last year in the same period of 2010 (52.4%). The Trade Balance of Indonesia for the period between January to August 2011 recorded another surplus both from the oil and gas commodities and the non-oil/gas exports. The Trade Surplus from the Indonesian non-oil/gas commodities for the period between January to August 2011 amounted to US$ 19.4 billion or increasing by 69.99% compared to volume in the same period of the year before that amounted to US$ 11.4 billion. Meanwhile the Trade Surplus from Oil/gas amounted to US$ 627.4 million compared to the deficit of US$ 399.1 million in the same period of previous year in 2010. With this trade balance, the total trade surplus for the period of January to August 2011 amounted to US$ 20 billion which increased by 81.86% compared to the surplus for the same period of last year in 2010 that amounted to approximately US$ 10.99 billion. In anticipation of the global economic crisis, the Ministry Trade is focusing on diversifying the export market, strengthening the competitiveness of Indonesian products and strengthening the domestic market. These three steps are aimed to mitigate the impact of the crisis towards the world trade.
The Ministry of Trade will focus on 3 (three) areas, namely diversification of export market, strengthening the competitiveness of Indonesian products and strengthening the domestic market. So far, the various government policies and programs are in line with the development of the world trade. Several policies and measures to drive the market diversification in the past recent years have shown positive results. The export growth from Indonesia to emerging market countries has continued to grow at a higher rate than the export rate to traditional markets such as Japan and USA. However, the Ministry of Trade still considers it necessary to maintain or in fact to increase Indonesia s market share in these traditional markets and for this, I have initiated bilateral meetings to discuss the trade and economic relations with UE in May 2011 and with USA and Japan in September 2011. Another focus of the Ministry of Trade is improving the competitiveness of Indonesian Products. In general the export products from Indonesia are now better positioned in the world market as reflected in the significant growth in the world market share. In 2006, Indonesia s export in the global Trade was merely around 1.2%, but in 2010, Indonesia s market share increased to 1.7%. Of course there is still room to further grow if we can improve our competitiveness. To enhance the competitiveness in the short run, the Working Group for Export Drive (The National Team for Export Drive and Investment) shall prioritize addressing the various constraints and high cost economy that the exporters/businesses are facing. In addition, the government also supports the diversification of export products and supports the programs to increase the added value of the export products. The issues on efficiency on logistics and connectivity that affects the disparity and fluctuation of the prices of the basic products are also the priority under the Connectivity Working Group under the National Team of KP3EI. To strengthen the domestic market, the Ministry of Trade has taken several appropriate measures to protect the domestic market by promoting the quality and utilization of the local products. In terms of unfair competition in the domestic market, the government has also taken various steps, among others through deregulating the anti dumping/safeguard policy, reinforcing required labeling and product standard, and consumer protection. Meanwhile the government continues to push the quality improvement of the domestic products, among others through the movement of 100% I Love Indonesia (ACI) which was launched in 2009. Government programs to build appreciation and the pride of the people towards its own products (batik, fashion products, shoes, food) shall be continued. Although Indonesia has not been affected by the impact from the crisis, the government is still cautious by providing policies and programs in anticipation of the negative impact. Meanwhile Indonesia s export is still performing very well and we are optimistic to reach near the target of US$ 200 billion this year. The impact from various problems in Europe and USA towards the global economy is becoming more evident. Trade,
consumption, and the world industrial production is slowing down and there has been revision on the economic growth rate of global trade. Last week, IMF revised its predicted economic growth rate from 4.4 % to 4% in 2011 and from 4.5% to 4% in 2012. This correction is applied to the growth rate of advance countries in particular, while for new emerging economies specifically Asian countries, the growth rate was only slightly revised. As a result, the growth rate of world trade is also predicted to slow down from 12.8% in 2010 to 7.5% in 2011 and 5.8% in 2012. Various developments will change the world trade map, such as the changes that Indonesia has experienced in the past five years, and in the future, it is predicted that the world economy growth will be mostly supported by the development from the new emerging and developing countries, in particular from countries in Asia which are predicted to reach a growth of rate of 6.4%, high above the average rate of the global economy. In facing the world economy, Indonesia s fundamentals are still strong, but we still be affected by the negative impact from the world economy so that Indonesia must seriously formulate and implement the strategic measures to minimize the impact from the slowing down of the global economy. Based on the experience in 2008/2009, Indonesia was proven to have taken the appropriate steps and have been able to maintain a positive growth rate. To support the diversification of export products and export market, the Ministry of Trade continues to utilize trade missions to target non-traditional countries such as countries in Africa, Asia and Middle East. In addition, every year the Ministry of Trade holds the Trade Expo Indonesia (TEI) every October and invites buyers from all over Indonesia. This year the 26th Trade Expo Indonesia will be held on 19-23 October 2011 at the Jakarta International Expo (JIExpo) Kemayoran. I hope that all of you would come and visit the 26th TEI and see directly the prime products of Indonesia. Ladies and Gentlemen, Before I end my remarks, in this opportunity I hope that all the relevant parties involved in the commodity futures trading and warehouse receipt system, shall be able to expand their business by complying to all the regulations. I recognize that to build and to deal with liquid, reliable and internationally acclaimed futures trading and warehouse receipt system is not an easy task. It needs time and support with sufficient resources. Having strong motivation and dedication to jointly build the national economy, we should be able to overcome the challenges and the constraints. We should avoid irresponsible conduct that may have negative effect on future trading. Furthermore, as reported by the Head of Bappebti in addition to this fun bike event, there will be other interesting activities such as the exhibition on future trading and SRG, ACI, door prize lottery with various prizes and the launching of uniform for sports activities for the employees of the Ministry of Trade.
The sports costume for the Ministry of Trade was chosen by the management and the officials of the Ministry of Trade in a democratic way, therefore I encourage all the employees to wear this outfit whenever there is a sports activity within the Ministry of Trade. Finally I congratulate all the stakeholders of the commodity Future Trading and Warehouse Receipt System on the enactment of the Amendment of the Law on Commodity Future Trading and Warehouse Receipt System that becomes the milestone for the industry Indonesia, and I hope that our aspiration will be soon be realized. I hope that all of you will be able to participate and enjoy all the programs in this fun event. To all participants, the committee of this fun bike, the event organizer, business people in futures trading and warehouse receipt and the sponsors, I highly appreciate your participation and your effort in making this fun event to run smoothly. I hope that this will enhance the friendship and relationship among the participants and serve as an education media and information to the participants and to the public on trade, PBK and Warehouse receipt SRG. Long Live Indonesia, Long Live Ministry of Trade, Long live Commodity Future Trading and Warehouse Receipt System. Thank you. Jakarta, 8 October 2011 Minister of Trade of the Republic Indonesia MARI ELKA PANGESTU