Amidst a significant decline in Indonesia’s main non-oil and gas exports in 2023, the nation faces economic challenges requiring collaborative efforts to identify causes and implement strategic solutions, emphasizing the need for investment in product quality, market diversification, and export infrastructure to revive export performance.
What’s New
Indonesia’s main export commodities, particularly non-oil and gas (nonmigas), experienced a decline in 2023. Data from the Indonesia Statistics (BPS) shows that the value of nonmigas exports reached US$242.87 billion in that year, representing nearly 94% of the total national export value. Despite the substantial amount, there was a decrease of 11.97% compared to the previous year (year-on-year/yoy). The decline primarily occurred in 10 out of 15 major nonmigas commodities, with the largest drop observed in crumb rubber by 29.98% (yoy).
Behind the News
Significant decreases were also observed in other commodities such as coal, basic organic agricultural chemicals, sports footwear, palm oil, and ready-made garments/textile confections. The export value of copper ore, electrical equipment, paper/pulp, and iron/steel also declined, albeit in a lower range. Only five out of the 15 major nonmigas commodities experienced an increase in export value, but these increases were relatively small and not significant in boosting the national aggregate.
Why It Matters
The weakening of Indonesia’s main commodity exports, especially nonmigas, could have negative implications for the country’s economy. This decline indicates challenges in maintaining or enhancing the competitiveness of Indonesian products in the global market. Commodities experiencing a decline in exports require special attention to identify the causes and find solutions to improve export performance in the future.
What We Are Thinking
Despite some commodities experiencing export increases, it’s important to note that these increases are relatively small and unable to offset the decline in the national export aggregate. The government and economic stakeholders need to collaborate to identify the causes of export decline and take necessary steps to address this issue. Investment in improving product quality, diversifying markets, and enhancing export infrastructure can be strategic steps to regain Indonesia’s export performance in the future.
