In 1999, Indonesia exported $48 billion worth of goods and services and imported $24 billion. Exports are mainly low-tech goods and natural resource-based products, including sport shoes, textiles, basic electronics, plywood, furniture, paper, palm oil, rubber, and spices. Imports are primarily machinery and equipment, chemicals, fuels, and foodstuffs.
Japan is the main destination for Indonesian goods, with 18 percent of total 1999 exports, followed by the
|Trade (expressed in billions of US$): Indonesia|
|SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.|
European Union (15 percent), the United States (14 percent), Singapore (13 percent), South Korea (5 percent), Hong Kong (4 percent), China (4 percent), and Taiwan (3 percent). Japan also is the main source of imports (17 percent), followed by the United States (13 percent), Singapore (10 percent), Germany (9 percent), Australia (6 percent), South Korea (5 percent), Taiwan (3 percent), and China (3 percent).
The crisis of the late 1990s ended a period of rising levels of trade, with exports increasing an average of 11 percent annually from 1993 to 1996. After the onset of the crisis, fluctuating exchange rates and the sudden absence of credit made it difficult for Indonesian companies to trade. Inflation and unemployment also reduced consumer demand for the increasingly expensive imports. Initial reports estimated that imports of capital goods (goods used to produce other goods), such as manufacturing equipment, fell 70 percent from 1997 to 1999. High levels of debt continue to restrict the ability of firms to borrow to finance trade deals.
The beginning of 2000 saw export growth resume to pre-crisis levels, although some of that was due to the rise in oil prices. Imports also rose, but by early 2000 they were still at only 60 percent of what they had been before the crisis. Further growth in imports is likely, especially in educational and training services, computers, telecommunications equipment, life insurance, and food supplements, as well industrial and agricultural chemicals, pulp and, paperboard, and equipment for forestry, mining, oil and gas exploitation, and food processing. There is still a need for reforms to reduce corruption and cronyism and promote the rule of law. Fears of political instability have also compounded the economic problems, scaring off foreign investors and trading partners.