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As per the current scenario, global economic

conditions appear to be improving as

compared to 2012, but at a slow and uneven

pace.

Like other commodity exporters, Indonesia

has clearly felt the effects of the weaker

global economy in 2012 through the trade

channel.

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The economic development of Indonesia

in the past half a century has waxed and

waned.

From near economic ruin and hyper-

inflation in the 1960s, to the oil boom ofthe 70s, to the economic crash of the late

nineties and finally to the relative

smooth sailing of the present globalfinancial crisis.

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The current trade agenda pillar of the

broader strategy is predicated on three

medium term trade policy objectives:

1. To increase the export of non-oil

products

2. To strengthen the domestic market and

manage the availability of basic

products3. To strengthen national distribution

channels

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Trade deficit of 846.60 USD Million in June of 2013

Balance of Trade averaged 788.24 USD Million from 1960 until

2013

All time high of 4641.92 USD Million in December of 2006

Record low of -1700 USD Million in April of 2013.

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Since the 1970s Indonesia has been

recording trade surpluses due to exports

growth.

However, in 2012, the country posted

trade deficit, as exports fell due to aslowdown in the global economy and

surge in imports.

Much of the decline in exports can beattributed to weaker commodity prices,

many of which remain under pressure.

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Imports decreased to 15587.30 USD Million in June

of 2013 from 16660.50 USD Million in May of 2013.

Indonesia Imports averaged 2598.62 USD Million

from 1959 until 2013, reaching an all time high of

17207.93 USD Million in October of 2012 and arecord low of 21 USD Million in September of 1959.

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Oil and gas (around 22 percent of total

imports)

Machinery (15 percent) Electrical equipment (10 percent)

Iron and steel (5 percent)

Vehicles (5 percent)

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China (19 percent)

Japan (15 percent)

The United States (7.5 percent) Singapore (7 percent)

Thailand

South Korea

Malaysia

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Exports decreased to 14740.70 USD Million in June of 2013

from 16133.40 USD Million in May of 2013.

Exports averaged 3434.26 USD Million from 1960 until 2013,

reaching an all time high of 18647.83 USD Million in August of

2011 and a record low of 30 USD Million in January of 1961.

Exports have been an engine of growth in recent years

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China (14 percent)

Japan (12 percent)

The United States (9.5 percent) India (8 percent)

Singapore

Malaysia

South Korea

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Indonesia has become a darling of someinternational companies and investors in recent

years as its strong economic expansion and

relative political stability have given more

people confidence in the market

Foreign direct investment in Indonesia grew 20%

last year to 175 trillion rupiah ($19.3 billion)

At that rate, Indonesia now appears to besignificantly outpacing many other Asian

countries that used to easily surpass it in

drawing foreign money

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Top foreign investors in Indonesia are

Singapore

Japan

The United States

The Netherlands

South Korea

The industries that attract the most

international investment are transportation,

mining and utilities.

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Posco plans to spend up to $3 billion on a

steel-making project in Indonesia by the end

of 2013.

Suzuki Motor Corp. will spend $779 million to

build an engine plant and increase output in

Indonesia.

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Toyota Motor Corp. has committed

$337 million to expand production

capacity.

Caterpillar Inc. will invest $150million to build a new factory to

produce mining trucks for

customers in Indonesia and

elsewhere in Asia.

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Complexity, lack of transparency and

trade-impairing effects of import

licensing requirements Export restrictions and taxes on raw

resources

Ownership limitations on banks

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Enactment of important laws and reformmeasures to investments, export

financing, customs procedures, as well as

in sectors such as agriculture, fisheries,shipping, mining and tourism.

Systemic efforts to reduce constraints on

trade, investment and production and to

streamline procedures at the border.

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