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had received a letter from its Jakarta counterpart stating that a decree which curbed exports to the Jewish state had been revoked.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.