JAKARTA (TheInsiderStories) – Indonesia government plans to build the largest storage and cold storage in the country to stabilize commodity prices in the country. The pilot storage project will be built in bonded zones with estimated total cost of Rp3 trillion.
“I think we build one or two storages first as a pilot project. We will see whether storages are useful or not and able to stabilize the commodity price. The government will support the project,” Trade Minister Thomas Lembong told reporters at a press conference on Wednesday.
The country has faced higher inflation in recent years due to volatile food prices. The root of the problem was because food products are not managed in good ways as well as due to lack of storages. The move is part of the government’s move to lower inflation rate to below 4 percent in the medium terms.
Tom assured that the government still discourse this plan but the economic team is very serious about this concept. He promised that in the following month the updates of this concept will be in place.
He added that the government will invite private companies to participate in this project through public private partnerships (PPP). The project could be financed partly by the State budget.
“I think private will own 70 percent to 80 percent of the project which could be backed up by Bulog (logistic agency),” he said.
Talking about export and import realization in August, Tom explained that the global trend is still not conducive for Indonesia and other emerging markets. He denied to says whether Indonesia will revise down the export target due to this unfavorable global economic condition.
He said global trade growth is still below the global economic growth in the last three years. The global trade only grew by 1 percent from previously 8 to 10 percent, while global economic growth stands at around 3 percent from around 4 percent previously.
”The global condition is still unfavorable and so challenging for us. We will work hard and do the best we can to boost our export growth and swiftly implement all regulations needed to boost export and rationalize imports,” he said.
Tom added Indonesia could ask President Joko Widodo as a “brand ambassador” of Indonesian products as he has become global phenomena. ”I see it as an opportunity, because he can become our national branding.”
Data from Central Statistics Agency (BPS) showed that exports from Indonesia grew 11 percent month-on-month to $12.7 billion in August, while shipments to Indonesia jumped by 22 percent to about $12.3 million, making the nation to post its ninth consecutive monthly trade surplus.
However, cumulatively, the nation’s import and export has been steadily declining.
Shipments from Indonesia in the January-August period fell 13 percent to $102.52 billion compared to the same period last year and import dropped 19 percent to $96.3 billion, according to data from the BPS.
Thomas noted the overall trend of trade —both nationally and globally — is still weak and will likely remain so until the global economy picks up.
President Joko Widodo’s economic team, headed by Coordinating Minister for the Economy Darmin Nasution, unveiled a policy package recently. The policy package revised 89 regulations considered detrimental to the country’s business climate, including regulations from the Trade, Industry, Finance and Agriculture ministries. (*)
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