Australia, Indonesia pledge to boost trade

Australia, Indonesia pledge to boost trade

By Riyadi

NUSA DUA, Bali (JP): Australia and Indonesia pledged here on
Thursday to take concerted measures to reinvigorate their two-way
trade which has of late been declining.

Ministers from both countries, gathered here for the fourth
meeting of the Australia Indonesia Ministerial Forum, said in a
joint statement that the return of growth to Indonesia's economy
would play a pivotal role in reviving the disrupted bilateral
trade.

They said that continued domestic reforms and the
liberalization of trade and investment in the two countries and
globally would improve the scope for an increase in both
countries' exports.

"The present level of economic relations between our two
countries -- especially in the fields of trade and investment --
still does not reflect the potential that we might possibly be
able to achieve," Coordinating Minister for Economy, Finance and
Industry Ginandjar Kartasasmita said at the closing of the two-
day ministerial meeting.

Two-way trade between Australia and Indonesia, which has
continued to grow during the past 10 years, fell to US$3.4
billion last year from $3.7 billion in 1997.

Nevertheless, Indonesia for the first time enjoyed a surplus
in its trade with Australia last year.

Indonesia's exports to Australia totaled $2.1 billion last
year, up 40 percent from $1.5 billion in 1997, but its imports
from Australia dropped 45.2 percent to $1.2 billion from $2.3
billion in 1997.

Indonesian Ambassador to Australia Wiryono Sastrohandojo said
Indonesia's increasing exports and decreasing imports from
Australia was a logical consequence of the sharp depreciation of
the rupiah against other currencies, including the Australian
dollar.

"Because we have not much money, we can not buy many products
from Australia. And because of the rupiah's depreciation, our
products become cheaper and they buy more from us than before.
That's logical," he said.

The only way to increase Indonesia's imports from Australia
would be to improve the purchasing power of the Indonesian people
by restoring positive economic growth, he said.

To mend the situation, the ministers agreed to pursue various
measures, including Australia providing export credit insurance
to assist the continued sale of essential items from Australia to
Indonesia's export industry.

They noted the importance of providing an adequate supply of
working capital for potential Indonesian exporters to take
advantage of the competitive rupiah exchange rate.

Australia was also committed to helping Indonesia improve the
quality of its products, especially food and agriculture
products, so that these items would be able to enter Australia
more easily.

Trade ministers from both countries on Wednesday signed a
memorandum of understanding to work to improve Indonesia's food
inspection and certification systems and facilitate trade in the
food sector.

Australian Deputy Prime Minister and Minister for Trade Tim
Fischer noted that the abolishment of basic commodity import
monopolies by the Indonesian Logistics Agency would help boost
Australia's farm produce exports to Indonesia.

The ministers were also committed to pushing investors from
both countries to increase their cross-border investment, which
would eventually boost two-way trade.

"The ministers noted that new opportunities for trade and
investment would arise from the economic crisis and restructuring
of the Indonesian economy," the joint statement said.

They identified sectors with continuing growth potential in
Indonesia, including agribusiness, mining and natural resources,
tourism, infrastructure, health, information technology and
telecommunications as well as financial and management services.

The ministers said both governments would pursue more trade
and investment through the Australia Indonesia Development Area
(AIDA), a regional economic zone linking northern Australia with
eastern Indonesia.

They cited agricultural production and processing, fisheries,
oil and gas, timber and rattan, shipbuilding, tourism and
education and health services as most promising sectors for
investors in the AIDA region.