French-Indonesian economic and trade relations

French-Indonesian economic and trade relations

Indonesia has been a major Asian trading partner for France
for a long time, and despite a deep economic and monetary crisis
affecting Indonesia since mid-1997, French companies have
confirmed their commitment to the Indonesian market. It is also
worthwhile to note that Indonesian exports to France amount to
almost 300 million euro, which is 20 percent higher than the
precrisis level.

As a result of the crisis, the bilateral trade balance is
nowadays strongly in favor of Indonesia. While France registered
a 394 million euro trade surplus in 1997, it recorded a 658
million euro trade deficit in 1999.

The main areas for French exports are semiproducts, 51
percent, including chemicals, 19 percent, and electrical
components, 20 percent. During the period 1997 to 1999, the
economic crisis strongly affected French exports, which decreased
70 percent in value (the drop was mostly registered in the
equipment goods sector where France has a strong position).

However, since January 2000, our exports have increased by 30
percent. Year 2000 will likely confirm the stronger trade
relations with Indonesia, which accounts for nearly 2 percent of
our exports outside the European Union.

Indonesian exports to France have strong positions in consumer
goods: textiles/garments and leather products, 25 percent,
furniture, 25 percent, and also agricultural and food products,
13 percent, amounting to 991 million euros of Indonesian products
exported to France.

In the last 30 years, a total of 2.5 billion euros has been
committed to finance over 300 development projects in the
following sectors: power generation and transmission, TV and
telecommunications, water treatment, airport and railway
infrastructures, agriculture and health.

With the crisis affecting the implementation of new
infrastructure projects, the French government has confirmed its
commitment to continue its financial cooperation with Indonesia,
through participation in international financial institutions, as
well as on a bilateral basis.

French aid to Indonesia is, however, being adapted to the
social priorities created by the economic conditions, focusing on
health, agriculture and fishery projects, while major
infrastructure projects already committed to are being continued
in the railway sector, civil aviation safety equipment,
irrigation and energy sectors.

At an international level, France is participating in the
International Monetary Fund, World Bank and Asian Development
Bank assistance program for Indonesia. As a member of the Group
of Official Creditor countries to Indonesia, gathered in the
Paris Club, France is also contributing to the two successive
public debt rescheduling agreements signed in September 1998 and
April 2000. Of a total of US$10 billion rescheduled loan
maturities due over the period from mid-1998 to the end of 2000,
France is involved for an amount of $700 million.

The commitment of the French authorities to support Indonesia
in this difficult period is based on a long-term background of
friendship between the two countries and will be continued with
the objective of strengthening our bilateral relations.