Indonesia asks China to help ailing IPTN and buy LNG

Indonesia asks China to help ailing IPTN and buy LNG

BEIJING (JP): Indonesia has asked China to help its ailing
national aircraft manufacturer, IPTN, through a joint investment,
Minister of Foreign Affairs Alwi Shihab said here on Tuesday.

"The market here is quite big and they have advanced aviation
technology," Alwi told Indonesian journalists after attending a
reception to celebrate the 50th anniversary of diplomatic
relations between Indonesia and China.

"Besides, China has the money," he added.

Earlier on Tuesday, Alwi met Chinese Vice President Hu Jintao
to discuss how Chinese aid to Indonesia could be translated into
an "actual" and "practical" way.

Alwi said that China gave a positive response to the idea of
the joint investment in IPTN.

"IPTN now has problems, while China has a big market. This can
be a healthy combination. What's more, we already have the
factory," he said.

Indonesia and China opened its diplomatic ties in 1950 but it
was frozen in 1967 two years after an abortive communist coup
which Indonesia then claimed involved China. The relations were
normalized in 1990.

Some Middle Eastern countries had shown their interest in
IPTN, but they always asked about the market, he said.

Alwi also proposed that China buy Indonesia's liquefied
natural gas (LNG). "Why should they buy LNG from the Middle East
if they can buy it from us."

China is expected to increase its investment in Indonesia,
which represents only 0.15 percent of its total investments
worldwide.

Alwi said that China was committed to providing export credit
worth a total of US$500 million, but so far it had not been
realized because of "insignificant technical matters." Among them
is a high exposure fee.

China has agreed to reduce the fee but Indonesian businesses
still consider the procedures to access the credit too rigid. "We
can buy goods which are cheaper here than in the U.S. or Europe,"
he added.

He said that up to now, China's investment in Indonesia was
low because of "psychological" obstacles. "Maybe there are some
of us in Indonesia who are still reluctant to be all-out, but now
that we have good relations with China, there should not be any
more obstacles.

"China won't interfere in our internal affairs, and they have
quite big potency."

He said China would be ready to help Indonesia restore its
economy if Indonesia could create a climate that was conducive to
investment, Alwi said.

"The Chinese vice president himself said this. It is not
diplomatic talk. It came from his heart," he assured.

China was the first country officially visited by President
Abdurrahman Wahid after he took power last October, which was
followed up on Monday by the signing of a Memorandum of
Understanding (MOU) on bilateral cooperation in the fields of
politics, economics, science and technology and tourism.

Another document, concerning a joint commission to settle any
problems that might emerge during the cooperation, was also
signed at the same time.

Alwi said that China had agreed to declare Indonesia a tourist
destination.

Indonesia now has a great opportunity to tap into the tourist
market in China and to encourage Chinese people to travel to this
country. This is due to the easing of the bureaucracy in applying
for visas. The government may, if necessary, also reduce the visa
fee. The President has authorized the Indonesian Embassy to issue
visas without any clearance from Jakarta. "In the end, we might
give them visas on arrival," Shihab said.

This policy, however, should be supported by the improvement
of the immigration department in Indonesia. He admitted that the
immigration officers often were suspicious about Chinese who
planned to travel to Indonesia and were prejudiced that they
would abuse their visas and become illegal immigrants in the
country. Alwi also rebuked corrupted immigration officers who
abuse their power and called them to clean up their acts.

Indonesia and China will also make an agreement on criminal
matters, including repatriation. "In the future, there should not
be matters like the Edy Tansil case," he said, referring to
corrupted businessman Edy Tansil, who is believed to have fled to
China. (sim)