Corruption remains main concern for Finnish investors

Corruption remains main concern for Finnish investors

Trade and investment ties between Indonesia and Finland have
grown rapidly over recent years after a period of stagnation
following the Asian financial crisis in 1998. Although two-way
trade between the countries remains relatively small, both
governments have agreed to boost trade and investment activities
in the near future. To learn more about the two nations' economic
ties, The Jakarta Post's Rendi A. Witular interviewed visiting
Finnish Minister of Foreign Trade and Development Mari Johanna
Kiviniemi. The following is an excerpt of that interview:

Question: How confident are you in the economic reforms in
Indonesia?

Answer: After meeting several Indonesian ministers, we believe
that the government is determined to make changes and improve the
business environment. The government is getting more trust from
the international business community and we hope that they will
succeed in implementing their economic policies.

However, corruption is still a big problem here. We haven't
had any chance to go into details with the Indonesian ministers
over this issue, but I think it is one of the biggest obstacles
for Finnish companies to invest here.

In that sense, the Indonesian government still has a lot of
work to do. It is not enough to just have policies. The
government should also have the determination to implement them
in practice.

The stability of economic growth, inflation levels and
political conditions are also among the considerations by Finnish
businesspeople before they decide to invest here.

What about security concerns? Especially after the recent
terrorist attack in Bali?
It is very regrettable what happened in Bali again. It will have
an impact to the tourist sector on the island and in Indonesia
overall.

But the Indonesian government has done a good job in cracking
down on terrorist groups. Therefore, I don't think the security
situation will get any worse. Terrorist attacks also happen in
other parts of the world.

I also don't think that the attack will disturb the economic
growth in this country.

How are the trade relations between Finland and Indonesia?
Trade has been growing since 2003. We had quite a lot of trade
activities already in the 1990s, but because of the Asian crisis
the intensity declined.

In 2004, Finnish exports and imports to Indonesia were valued
at 127 million euro (US$150 million) and 118 million euro,
respectively, and have been growing very rapidly this year.

There is a great potential in Indonesia following its recent
higher economic growth. The country has a big market.

The government's policy for the economic sector -- not only in
trade but also in investment -- is getting more progressive, and
the business climate here is more conducive. In the future,
Finnish companies will not only seek trade opportunities but also
investment.

On the investment side, we are very interested at the moment
in the pulp and paper industry, while in the trade sector we are
offering various products, particularly machinery for the
forestry industry, telecommunications and electricity generators.

Finnish imports from Indonesia mostly consists of crude
materials and minerals, transportation equipment, food and
beverages.

There has been growth in the trade between the two countries
since 2003. For the first six months of this year, Finnish
exports and imports from Indonesia reached 127 million euro and
118 million euro, respectively.

I expect two-way trade will grow by an average of 40 percent
this year and probably next year.

Last December, Indonesia imposed antidumping duties on uncoated
printing and writing paper being exported here by a number of
Finnish companies. How do you see this policy?
We brought up this issue during a talk with the Indonesian
minister of trade, and I pointed out that this was not the way to
improve trade and investment ties between the two countries.

The minister, however, was not able to answer all of the
detailed questions, but I think she heard our message.

Indonesia is known to be one of the world's largest forestry-
based exporters, with several of its products also sold in the
Finnish market. There are concerns here that some of the products
that have entered your country come from illegally felled timber.
Are there any efforts to ban these products from your market?
We have also discussed this issue with the Indonesian minister of
trade. From the Finnish side, we are taking efforts to ensure
that no illegal forestry products enter the country. However,
there are no restrictions that have been issued to specifically
prevent the entry of illegal products from Indonesia. It depends
on the customers. Customers in Finland have a high degree of care
for environment sustainability.