Canadian firms pledge more investment in Indonesia

JAKARTA (JP): Canada is expected to continue showing faith and interest in the Indonesian economy by further expanding investment and trade with the country, particularly in the area of small and medium-scale enterprises.

The Canadian Embassy's senior trade commissioner, Ken Lewis, said here recently that Canadian firms remained enthusiastic about the opportunities available in the country.

He conceded that the bulk of the investment expansion in the coming years would be from firms already established here, but stressed that there was evidence small and medium enterprises were also making headway in their investments in Indonesia.

He pointed to furniture and environmental technologies as areas where new investment was forthcoming. Without going into detail, he added that several mergers and acquisitions were also in the works involving Canadian and Indonesian companies.

Indonesia remains not only one of Canada's most important investment destination in Southeast Asia, but also its largest, with an estimated total US$5.4 billion. Nearly three-quarters of this investment is in the mining and energy sectors.

Mining and smelting giant INCO in Sulawesi is a major investor along with other companies in the oil and gas sector.

Two-way trade also remains relatively high despite the sudden drop in purchasing power in Indonesia due to the economic crisis.

Up until 1997, Indonesia was Canada's fastest growing export market. Two-way trade was relatively balanced with a sum exceeding $1 billion.

Statistics for 1999 indicate that despite a drop in the imports of Canadian products, from nearly $550 million in 1997 to $372.5 million last year, Indonesian exports have in fact been rising, from $560 million in 1997 to $628 million in 1998 and then back down to $593 million last year.

Top Canadian exports continue to be resource-based products, such as pulp, cereals, fertilizers and sulfur. In the last two to three years in particular, the export of aircraft parts has seen a significant jump.

Meanwhile, Indonesian exports to Canada continue to be dominated by electrical parts, clothing, footware and rubber.

When asked about possible impediments against the entry of even more Canadian companies to Indonesia, Lewis cited the prevailing uncertainty regarding economic policies, security and political stability.

He added that overly negative international media reports have also unnecessarily dissuaded many investors.

"The most important thing is we can get them out here and then they can see for themselves the opportunities available," he said.

In a bid to boost exposure of its already strong presence in trade and investment here, Canada is holding a series of conferences on business cooperation in Jakarta and Makassar, South Sulawesi.

A two-day seminar at the Regent Hotel in Jakarta beginning on Monday will include a keynote address by Minister of Industry and Trade Yusuf Kalla.

Meanwhile, the seminar in Makassar will begin on Thursday and will feature Canadian speakers as well as their local counterparts. (mds)