Newsletter: April 2003
Indonesia
to Revive Textile Industry
Contributions of the Textile Industry
According to Trade Minister Rini Suwandi, Indonesia should continue maintaining the textile and textile product industry because it absorbed a lot of employment, investment as well as contributed significant foreign exchange to the country. The state's foreign exchange income from the industry comprised 15.2 % of the country's total income from non-oil exports.
Indonesia's exports of textiles and textile products in 1990 were recorded at only US$2.9 billion but in 2002 they rose to US$6.8 billion in value. However the industry is continuously facing hindrances internally as well externally causing performance decline.
The country's exports of textiles and textile products in the past four years had continued to drop in value.
To Crack Down Smuggling
On
the other hand, Indonesian
smuggling of textiles, textile products and used clothing has escalated
recently. To avoid textile smuggling cases, API suggested that the
government change the existing customs law. Many items in the customs law
are inappropriate and could be misinterpreted.
To Seek Funds from Taiwan
Several Taiwanese banks are being approached by textile producers in West Java in a bid to raise finance to pay for machinery upgrades and replacement. Taiwan’s creditors have already expressed their willingness to provide long-term credits to the textile producers who purchase new machinery from Taiwan.
The decline of Indonesian textile exports in recent years is partly due to the inefficient aging machinery used by many of the country’s textile makers. The country's textile industry needed some $6 billion to repair aging machinery to boost production. Around 60% of current textile machinery has been in use for more than 15 years.
