Indonesia Trade Minister Says Better Food Distribution a Focus

Indonesia’s new Trade Minister Muhammad Lutfi said his priority will be to improve food distribution to curb inflation that has remained elevated after the Southeast Asian nation raised fuel prices in June.

Natural disasters such as floods and volcano eruptions on the islands of Sumatra and Java pose a challenge to the steady supply of staple goods, Lutfi said in an interview with Bloomberg TV Indonesia yesterday before his official appointment today to replace Gita Wirjawan. Lutfi is also seeking to improve the current-account deficit, which he expects to turn positive in the “near future.”

“This is the mandate that I have to focus on,” said Lutfi, who headed the nation’s investment coordinating board for four years from 2005 to 2009. “There are no other issues but ensuring trade, distribution of goods and exports and imports.”

Lutfi, 44, has only about eight months left to meet his targets before President Susilo Bambang Yudhoyono’s second five-year term expires in October. Price gains are eroding purchasing power in Indonesia, where household consumption accounts for more than half of the economy.

Consumer prices rose 8.22 percent in January from a year earlier, as the rate stayed above 8 percent for a seventh month. Inflation will remain elevated this month and next because of bad weather, central bank Governor Agus Martowardojo said Feb. 7.

Indonesia’s current-account deficit may have narrowed to below 2 percent of gross domestic product in the final three months of 2013 from a record-high 4.4 percent in the second quarter, Martowardojo said Feb. 6.

Floods inundated parts of the Central Java province this month, forcing almost 28,000 people to take refuge, according to the nation’s disaster management agency. In the province of North Sumatra, 17 people died in a recent eruption of Mount Sinabung, while 19 other volcanoes across the archipelago have been placed on alert status, the agency said.

Wirjawan resigned as trade minister last month to pursue his bid to become the next president of Southeast Asia’s biggest economy in a July election.

To contact the reporters on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net; Agus Suhana in Jakarta at asuhana1@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

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