Thu, 23 Sep 1999

Banking snags curb Indonesia's exports to E. Europe

JAKARTA (JP): An absence of banking relations between Indonesia and Rumania is hampering the country's businesspeople from tapping the potential of emerging markets in eastern Europe, a businessman said on Wednesday.

Director Sebastian Tanamas of Tanamas Industry & Co., a firm which exports handicraft and rattan furniture to Rumania, said at a seminar that although the eastern European market was promising, non-existent banking relations created difficulties with payments.

Citing an example, he said that Rumanian importers paid from 20 percent to 30 percent of their transaction values up front, and settled the remainder only after goods were delivered.

"This kind of deal can land you in trouble. I have been deceived (in the past)," Tanamas said at the seminar on opportunities in eastern Europe and South African markets.

Rumanian Consul for Economic and Trade Affairs Niculae Dinu- lonita told the seminar that Indonesian shoes, textiles and garments were competitively priced for eastern European markets.

He said Rumania, as a gateway to eastern Europe, offered tax and tariff incentives to foreign investors establishing businesses in the country.

Indonesia's Director General for International Trade and Industry Cooperation Hatanto Reksodipoetro said that many exporters were unaware of business opportunities in eastern Europe.

"It seems that our businesses are preoccupied with traditional markets, such as the United States and western Europe," Hatanto said.

He said Indonesia's exports to eastern Europe in 1998 totaled US$458 million, an increase of 28.26 percent from 1997, but that the amount represented only 0.94 percent of the country's total exports.

Hatanto added that Indonesian exports to South Africa increased 21.02 percent to $157.3 million in 1998, from $130 million in 1997.

Indonesian exports to South Africa comprise textiles, footwear, plastics and rubber, pulp and paper and vegetable products. (01)