Indonesia denies lifting Israel trade barriers

Indonesia denies lifting Israel trade barriers

JAKARTA (Reuters): Indonesia, the world's largest Muslim
nation, denied on Tuesday that it had lifted trade barriers with
Israel, a move that would ignite protests from Islamic groups
opposed to ties with the Jewish state.

"We haven't issued any decree removing the trade barriers. The
barriers are still there," Riyanto Yosokumoro, director general
of international trade at the Trade and Industry Ministry told
Reuters.

But he acknowledged that some businesses in the private sector
had unofficial links.

Israel's Ministry of Industry and Trade said on Monday it had
received a letter from its Jakarta counterpart stating that a
decree which curbed exports to the Jewish state had been revoked.

Indonesia and Israel do not have diplomatic relations,
although President Abdurrahman Wahid hinted in late 1999 that he
planned to resume trade ties with Israel.

He quickly backtracked after that idea triggered an outcry
from Muslim groups. There were also regular anti-Israel street
protests late last year in Indonesia over a spate of violence
between Israelis and Palestinians.

An upsurge in violence between Israel and its Palestinian
neighbors has killed 310 Palestinians, 45 Israelis and 13 Israeli
Arabs since last September.

Yosokumoro said many Indonesian businessmen were eager to
trade with their Israeli counterparts, and some had established
unofficial ties.

"We realize the private sector here wants to trade with Israel
but we have to take into account strong opposition from the
public," Yosokumoro added.

Trade barriers have kept direct bilateral trade to a
negligible US$20 million.

Industry sources said Israel was interested in buying palm
oil, coffee, plywood and furniture. Indonesia was interested in
importing telecommunications equipment and high-tech products,
they said.