Plans to force Indonesian exporters to use letters of credit (L/Cs) in large overseas sales have been shelved.

Now the government is looking at other ways to boost international trade and revive the country's export-oriented economy.

Controversial

Plans to force the use of L/Cs for export shipments valued at more than US$1 million proved controversial.

The move was meant to boost foreign exchange, but the government shelved the plans after pressure from exporters.

Contracts in jeopardy

Indonesia's exporters argued that forcing them to use L/Cs in large transactions would jeopardise long-standing export contracts.

The new regulations were originally scheduled to come into force in April.

Other measures

Indonesia anticipates a 20 per cent fall in exports this year and has taken several measures to boost international trade.

President Susilo Bambang Yudhoyono's administration has announced subsidies for strategic export industries, including mining, rubber, cocoa and palm oil.

The government has also promised to tackle bureaucracy and corruption at the country's ports, both of which officials say are cheating Indonesia out of export revenues.

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