Today : Feb 27, 2025
Economy
27 February 2025

Indonesia Strengthens Export Regulations To Boost Domestic Economy

The government prioritizes local production and collaborates with rural areas to develop export potential.

The Indonesian government is taking decisive steps to reshape its export regulations and initiatives, marking significant progress toward bolstering domestic production and promoting international trade. This approach mirrors the shifting economic policies aimed at ensuring sustainability and maximizing domestic benefits.

At the forefront of this transformation is Bahlil Lahadalia, the Minister of Energy and Mineral Resources, who has affirmed new regulations restricting crude oil exports. "Dari seluruh produksi minyak yang tadinya itu diekspor, di zaman kami sekarang, udah nggak kita izinin ekspor," Bahlil declared, emphasizing the need to prioritize domestic consumption over foreign sales. This marks a pivotal change from previous practices and aims to secure oil supplies for the local market, as Indonesia endeavors to improve energy security.

The regulation aims to tighten controls over crude oil exports from contractors operating within the country, as outlined by the government’s strategic planning. Historically, concerns had been raised about oulining oil not meeting local refinery specifications, creating issues for domestic processing. Bahlil has indicated plans to address these concerns by blending different quality oils to make them suitable for local refineries—a solution to the existing challenges.

Further, the emphasis on domestic production isn’t limited to petroleum alone. The role of customs agencies is also central to this initiative. Recent collaborative efforts have seen Bea Cukai (Customs) working alongside local governments, as illustrated by their outreach and educational campaigns aimed at equipping local businesses with the knowledge and means to navigate export processes effectively. Budi Prasetiyo, from the Customs Subdirectory, highlighted, "Sosialisasi kepada pelaku usaha merupakan salah satu upaya Bea Cukai untuk mendorong kinerja ekspor di tiap-tiap daerah," demonstrating the agency's commitment to enhancing local export capabilities.

This socialization effort includes insights on facilities like kawasan berikat (bonded zones) and kemudahan impor tujuan ekspor (KITE), which are aimed at reducing trade barriers for small and medium enterprises (SMEs). Leaders from various regions are encouraged to engage with these initiatives to bolster their local economies. For example, Heru Karyawan of the Association of Export Processing Zones D.I. Yogyakarta notes, "Dengan fasilitas tersebut, industri bisa tumbuh dan berkembang sehingga memberikan dampak ekonomi di daerah," underlining the importance of such supports to stimulate economic activity.

Rural areas are also seeing newfound attention thanks to the collaboration between Yandri Susanto, the Minister of Desa dan Pembangunan Daerah Tertinggal, and Trade Minister Budi Santoso. Yandri has expressed his intent to develop thousands of village-based export initiatives, focusing on showcasing unique products from rural regions, such as jagung, udang vaname, and kerajinan kendang djembe."Kami akan menciptakan ribuan desa Ekspor," he declared, highlighting the government's commitment to leveraging local resources to optimize export potential.

This ambitious program seeks to not only boost exports but also support the broader economic targets set by the government, aiming for growth rates of 8 percent by 2029. Yandri pointed out the untapped potential within these communities, stating, "Jadi banyak sekali potensi desa itu yang bisa diekspor, tinggal mereka kadang-kadang gak tahu jalannya. Enggak tahu ke mana ini dipasarkan." This highlights the importance of connecting rural producers with global markets and ensuring they receive the necessary training and support to succeed.

Collectively, these programs and regulations form part of Indonesia's strategy to create sustainable economic growth, ensuring local needs are met before pursuing international opportunities. By prioritizing local consumption, enhancing export procedures, and empowering rural enterprises, the Indonesian government is clearly setting the stage for a more resilient economy. The collaboration between ministries signifies the need for holistic approaches to trade and production, shaping Indonesia's future on both domestic and international levels.