An Ideal counterpart for Indonesia

An Ideal counterpart for Indonesia

Foreign trade is an important factor in Poland's economic
growth. The share of trade exchange in the GDP has grown from 35
percent in 1990 to 52 percent in 2000.

Last year total exports were valued at US$31.7 billion and
imports reached $48.9 billion. This year exports have been
growing at a record pace, while the value of imports remained
stable.

European Union countries are the main partners of Poland in
foreign trade. Their share in total Polish international commerce
accounts for more than 75 percent.

Germany is the main single trade partner - it is the
destination of 35 percent of Poland's overall exports and the
source of 24 percent of Polish imports - followed by Italy,
Russia and France. The above figures prove the high quality of
"Made in Poland" products and their competitiveness.

Trade with member countries of the Central European Free Trade
Agreement - CEFTA (Czech Republic, Slovakia, Poland, Hungary,
Rumania, Slovenia and most recently Bulgaria) is also on the rise
following liberalization of import duties.

The commodity structure of Polish exports has undergone
profound changes in recent years, marked by the shift from
agricultural and primary exports to labor-intensive manufactures.

Nowadays, Poland sends abroad not only various engineering
products, such as motor cars, ships, boats, civil engineering
machines and electrical equipment but also textiles, furniture
(the second largest exporter in Europe), footwear, packaging
machines, as well as a rich variety of food products.

The well-deserved sense of accomplishment should not prevent
us from recognizing many challenges that Poland must still face.
Those include a foreign trade imbalance and a relatively high
level of unemployment.

The only way to meet the former challenge is through
increasing the export capacity of the economy by securing more
investment, even better technology and higher productivity.

The latter is a natural effect of the transformation from
large, ineffective state-owned enterprises to an economy run by
more efficient private companies and should be resolved
eventually when the workforce undergoes necessary retraining and
becomes absorbed by the fast-developing private sector. However,
the social implications of even temporary unemployment cannot be
overlooked.

Special attention must also be given to restructuring of the
agricultural sector, which employs almost a quarter of the
workforce while accounting for only 3 percent of GDP. Finally,
resources must be found to increase R&D spending to stimulate
productivity and shorten the technological life cycle of
domestically produced equipment.

Indonesia is an important trade partner of Poland in the
South-East Asia region. The mutual trade turnover shows a steady
growth tendency.

According to Polish statistical data, the value reached $208
million in 1998, $209 million in 1999, and $219 million in the
following year.

It is estimated that more than 97 percent of mutual commerce
exchange on the Polish side is done by private companies.

The long tradition of commercial relations between the two
countries saw Indonesia exporting to Poland mainly agricultural
products and raw materials, such as natural rubber, coffee, tea
and spices. This commodity structure has undergone profound
changes in recent years. The share of chemical compounds and
telecommunication equipment in total Indonesian exports to Poland
is rising every year. Man-made yarns, garments, cloths, footwear,
rattan furniture and paper products are also exported to Poland
in large quantities.

On the other hand, Polish companies supplied to Indonesia
various kinds of machinery, civil engineering equipment,
chemicals, steel products, powdered milk and electrical
apparatus. The commodity structure of Polish exports to Indonesia
is rather stable, while Polish purchases from Indonesia become
more diversified every year.

Unfortunately, a considerable part of trade transactions
between Poland and Indonesia is executed by intermediary
companies from other countries.

Polish businessmen consider Indonesia an attractive market
offering great prospects. Producers and exporters alike are
looking for new opportunities to supply mining, electrical,
agricultural and food processing equipment, machine tools,
packaging machinery, power generation equipment, various kinds of
chemicals, including fertilizers, herbicides and insecticides as
well as technology, all of which are in demand in contemporary
Indonesia.

High-quality "Made in Poland" products can still be offered at
very competitive prices, thanks to a comparative advantage in
labor costs.

Polish business is keen to acquire new trade partners in
Indonesia and establish more direct relations with individual
companies.

The legal framework provides a firm basis for further
development of trade and economic cooperation between Poland and
Indonesia. In 1974 the countries signed a trade agreement, in
1986 an agreement on the development of economic and technical
cooperation, and in 1992 two agreements - on avoidance of double
taxation and on promotion and protection of investments.

Polish customs regulations offer a considerable advantage to
Indonesian exporters entering the Polish market. The present
system of customs duties is in line with GATT and WTO principles,
and provides differentiated customs rates according to the
country of origin.

Indonesian products enjoy lower tariffs under the General
System of Preferences (GSP). In fact, almost all agricultural
commodities imported from Indonesia may enter the Polish market
without payment of customs duty (zero tariff). In order to be
eligible for such preferences, commodities must be sold directly
to Poland.

Indonesian businessmen interested in starting activities in
the Polish market will find many attractive opportunities. They
may easily open a representation office or find a partner to
cooperate with. Therefore, Poland is expecting more and more
Indonesian companies to visit Poland in the future, searching for
trade and business opportunities.

The best way to get acquainted with the Polish exports on
offer and also to present Indonesian products to many potential
customers, is to participate in international trade fairs and
exhibitions organized in Poland.

Some well-known events with a long tradition include:
* Poznaq International Fair, Fair for Industrial Technologies and
Investment Goods - the largest exhibition held annually in Poznaq
City Fair Grounds in June;
* Poznaq Fashion Week: Featuring clothes, fabrics, jewelry,
footwear and leather -- organized twice a year in March and
August;
* Domexpo, Trade Fair for Household Appliances: Featuring
household appliances, lighting equipment, heating, ventilation
and air-conditioning, interior decoration - organized annually in
October;
* Polagra-Farm, Agricultural International Trade Fair: Dubbed one
of the biggest agricultural machinery, equipment and tools and
fertilizer fairs in Europe -- held every October;
* Polagra-Food, International Trade Fair for Food Industry:
Exhibiting the latest machinery and equipment for food processing
industry, packaging machines, farm produce and foodstuffs -- held
annually in September;
* Meble, Furniture and Furnishings Fair - organized annually in
May;
* Drema, International Exhibition for Woodworking Machines and
Tools: Featuring machinery and equipment for forest and sawmill
industry, machines and equipment for cellulose and paper-making
industry -- organized annually in May together with Meble,
Furniture and Furnishings Fair;
* Taropak, Packaging Technology and Logistics International
Exhibition: Featuring packaging and accessories, packing machines
and equipment and packaging manufacturing machines -- organized
annually in October, together with Domexpo;
* Poleko, Ecological International Fair: Displaying water, soil
and air protection technology and equipment, control and
measurement apparatus for monitoring pollution, noise and
vibration, management of industrial, municipal and chemical
wastes, municipal transport and transport means -- organized
annually in November; and
* Baltexpo, International Shipbuilding and Maritime Equipment
Exhibition -- held every two years in September.

Acknowledging the Polish export possibilities and the great
significance of the Indonesian market, many Polish producers and
exporters have visited Indonesia in recent years.

They participated in some important exhibitions in Jakarta,
for example in the annual Mining and Electric Indonesia, Oil and
Gas Indonesia, and Manufacturing Indonesia in 1997, 1998, 2000,
and every Building & Construction Indonesia event since 1996.
During some exhibitions Polish companies have presented their
products and services in national pavilions.

This year alone, Poland has already participated in two
exhibitions in Indonesia. For the first time it has taken part in
an agricultural exhibition called "Agro & Food Expo 2001" to
promote Polish agricultural machinery, food processing equipment
and processed food products.

As has already become a tradition, an offer of the Polish
manufacturing sector was presented at the Manufacturing Indonesia
2001 exhibition.

Currently, from Nov. 7 til Nov. 10, a number of examples of
Polish equipment and machines for the mining and energy sector
are being presented at Poland's National Information Stand No.
2530 in Hall A3 at the Mining & Electric Indonesia 2001
exhibition held at the Jakarta International Exhibition Center in
Kemayoran, Central Jakarta.

Polish companies offer many business and cooperation
opportunities for interested Indonesian partners, especially in
such areas as: the steel industry, the shipbuilding industry
(including construction of tankers, container ships, LPG and LNG
ships, Ro-Ro and passenger ships, fishing boats, navy ships and
rescue boats), underground and open-cast mining equipment, the
chemical industry, the machine-tool industry, building and
construction machinery, food processing plants and environment
protection equipment and know-how.

Prospective purchases from Poland may also include such goods
as: fertilizers, pharmaceuticals, processed food, powdered milk,
measuring instruments, agricultural machinery, railway equipment,
energy sector equipment and fire-fighting and rescue aircraft.

In order to explore new areas of bilateral trade and to
strengthen economic cooperation between Poland and Indonesia,
more direct contacts between business circles are required, as
well as becoming more familiar with each other's economies.

Then, no doubt, mutual trade will grow to the benefit of both
of our distant (only geographically) countries.