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Global financial crisis is predicted to severely affect handicraft and meuble export in the first quarter of 2009. Export of meuble and handicraft products is estimated to decrease down to 35% compared to the same period of last year. Chairman of Meuble and Handicraft Industry, Ambar Tjahjono said yesterday (Thursday, January 29th) in Jakarta. She estimates that export value will not exceed 357 million dollar, significantly lower than 510 million dollar achieved last year.

Ambar did not neglect that the decrease in meuble and handicraft products is an impact of global financial crisis. The crisis affected the developed countries which are also the target of Indonesian meuble and handicraft export. “After March export performance may get better, depends on the economic policy of President Obama,” Ambar said.

To improve competitive advantage of Indonesian products, Ambar insisted the government to waive the value added tax of rattan material. So far there is a 10% tax on inter-island transported raw rattan. “The tax component affects the price of the final product,” she continued. At the end, it is difficult for Indonesian rattan product to compete in international market. She suggested the government to pay more serious attention to meuble and handicraft industry as they employs a significant number of work force. “In all stages meuble and handicraft industry employ 11 million labors,” ambar said. Last year meuble and handicraft industry contributed 2.55 billion dollars into export income.

Ambar said the government once annouced a plan to five tax incentive for 17 sectors in which rattan got an allocation of 100 billion rupiah. Unfortunately allocation for rattan was cancelled. The government consider that incentive on raw material would not immediately affect price of final products.

To stimulate export market, Ambar also expected the banks to decrease interest rate down to 6%-7%. “With current 17% interest rate, it is difficult for businesses to move their wheels. Decrease of interest rate is essential to allow industry to remain in business,” she added.

Chairman of Marketing Division of Indonesian Meuble and Handicraft Industry Association, Andre Sundriyo thought that to maintain export, the government has to intensify promotion efforts. “The government shall provide assistance for exhibition in and outside Indonesia, especially for micro and small enterprises,” Andre said.