Certainly, it is impossible to cover all exports."
Jakarta (ANTARA News) - The government has charged the Indonesian Export Finance Agency (LPEI) to fully support the country`s export program to cut the trade deficit which reached US$3.7 billion in the second quarter of this year.

"Indonesia has found a way out to recover exports through diversification of commodities and export destinations. However, support is needed from LPEI in the form of export financing, guarantee and insurance," acting chief of the fiscal policy of the finance ministry Bambang Brodjonegoro said.

Bambang said LPEI`s duty is to secure export program in the event that banks and other non bank financial agencies could not carry out their function to secure exports.

"We are not hoping to fully recover exports to the normal level, but what is important now is to minimize the current account deficit by increasing exports and reducing imports. Imports could be easily reduced with fiscal policy," he said.

He said the special assignment for LPEI is part of the program of National Interest Account (NIA) that is to support national exports .

"It is commercially not viable but needed to maintain level of export earning such as through expansion of exports to non traditional markets where there are political and security risks that might come as a hindrance," he said.

He said the government will strengthen LPEI financially to be more effective in carrying out the NIA program to prop up the country`s sagging exports amid weak demand from traditional markets.

"In 2014, we will strengthen capital system and make them an effective instrument to boost exports. Certainly, it is impossible to cover all exports. Some exporters have to use commercial credits," he said.

He said that raw materials would no longer be found among the export commodities to be covered under the LPEI program.

The export commodities should be manufactured goods that carry higher added value and other main commodities, he added.

"Based on experience we should start with manufactured commodities, or at least natural resource based commodities. In addition we should focus on `proven` commodities. We could no longer afford to do too much experiment," he said

Since it was established in September 2009, LPEI has functioned to finance , guarantee and insure exports with export guarantee to exporters reaching Rp32.1 trillion.

Through NIA program, the government applies a project or a special transaction to boost exports, a strategic policy involving a number of ministries and agencies.

This program is aimed at providing stimulus to boost exports by taking into account core competitiveness, double effects on the economy.
(Uu.H-ASG/N001)

Editor: Priyambodo RH
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