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.