Jakarta. Indonesia must increase the share of tradable goods in its economy to strengthen exports and generate more foreign currency revenues, National Development Planning Minister Suharso Monoarfa said on Tuesday.
Suharso noted that tradable goods, such as manufactured products and commodities, currently account for less than 50 percent of economic transactions. In contrast, non-tradable goods and services — like property development, transportation, and the communication and information sectors — continue to dominate the economy.
This imbalance negatively impacts Indonesia’s current account balance, he explained.
“The export of tradable goods is key to generating foreign exchange revenues,” Suharso said during the Investor Daily Roundtable discussion at the Mulia Hotel in Jakarta.
He warned that the growing demand for US dollars to support imports could further weaken the rupiah and harm economic growth.
“If our current account is under pressure, we need to generate greater revenues in US dollars while the central bank must maintain foreign exchange reserves. It’s crucial for us to alleviate this kind of pressure,” Suharso told the discussion’s host, Enggartiasto Lukita.
To address this issue, the government is prioritizing the industrialization of commodities and restricting the export of raw minerals and ores. These measures aim to create added value and boost the share of tradable goods in the economy, Suharso added.
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