Wed, 24 Feb 2010

From: The Jakarta Globe

By Irvan Tisnabudi& Dion Bisara
The government plans to capitalize on US President Barack Obama’s visit to Indonesia in March by signing a number of bilateral agreements, Coordinating Minister for the Economy Hatta Rajasa said on Tuesday.

“There will be a total of six types of cooperation formed between Indonesia and the United States, and they [the US] will be preparing a large amount of investment,” Hatta said on the sidelines of a coordination meeting held at the Finance Ministry.

Hatta said the six agreements would cover energy, forestry, natural resources, agriculture, oil and gas and education.

He declined to speculate on how much investment might be forthcoming but said the agreements were aimed at boosting the country’s prosperity.

“The desires of foreign nations, particularly the US, to invest in Indonesia have been increasing in recent times, mostly due to our economic performance in facing the global economic crisis, so Indonesia needs to take advantage of this,” Hatta said.

Analysts have welcomed Barack Obama’s visit, scheduled for March 20-22, amid hopes that it would help increase trade with the United States.

According to data from the Central Statistics Agency (BPS), Indonesia’s non-oil and gas exports to the United States totaled $10.46 billion last year, a decline from $12.53 billion the previous year because of the global financial crisis.

Indonesia’s non-oil and gas imports from the US in 2009 amounted to $7.04 billion, slightly lower than the $7.7 billion recorded in 2008.

When former US President George W. Bush visited Indonesia in 2006, non-economic issues such as terrorism dominated the agenda, said David Sumual, an economist from PT Bank Central Asia.

David added that since Obama spent part of his childhood in Indonesia, he should better understand how to approach the country and its people.

Winang Budoyo, the chief economist at PT Bank CIMB Niaga, said that even though Obama’s trip will only last three days, such a high-level visit would have a huge, beneficial impact on the country.

“It’s a sign that the US president is paying special attention to Indonesia,” Winang said.

“His visit will mark a vital stepping stone for the follow-up of cooperation in the six sectors mentioned,” Winang added.

Sofyan Wanandi, chairman of the Indonesian Employers Association (Apindo), said he was excited about Obama’s visit.

“Coming here as a leader of a country certainly gives a green light to their investors to invest in Indonesia, so no doubt it will improve economic relations between the two countries,” he said.

Sofyan said he hopes US businesses look to invest in value-added industries rather than just raw materials.

“I would hope they would invest more in oil refineries, for example, to create more value-added products, so we would not be invested in just for access to our raw materials,” Sofyan said.