Indonesia seeks Italy's help to boost small firms

JAKARTA (JP): Indonesia seeks more trade and investment cooperation with Italy, especially to strengthen the country's small and medium-sized businesses, the Indonesian Chamber of Commerce and Industry (Kadin) says.

Aburizal Bakrie, chairman of Kadin, said yesterday that Indonesia needed to follow Italy's success in promoting the role of small and medium-sized companies in the country's economy.

"The priority at hand for both countries is how to strengthen their dynamic partnership, including cooperation with small and medium entrepreneurs," Aburizal said at a business luncheon with visiting Italian Prime Minister Romano Prodi and his trade delegation.

Aburizal said the two countries could cooperate in automotive components, petrochemical and oil distribution sectors.

Prodi and 80 high-ranking government officials and prominent business delegates arrived here yesterday for a two-day visit.

Prodi met with President Soeharto and State Minister of Research and Technology B.J. Habibie here yesterday before attending the luncheon with Kadin.

Prodi said yesterday that Italy was ready to contribute to the growth of small and medium-sized Indonesian businesses technically and financially.

"We are ready to extend special credit to help small and medium-sized enterprises create joint ventures here," he said.

He said his country would likely help the development of machine tools and metal industries, textile machinery, wood- working machinery, and footwear and leather industries.

Kadin's vice chairman Fadel Muhammad said yesterday that Italy had agreed to provide financial assistance to small and medium- sized Indonesian businesses.

"We have spoken to the prime minister and the ambassador about providing soft loans to small and medium Indonesian businesses," Fadel, also chairman of the Bukaka Group, said after the luncheon.

He said Italy had agreed to give between US$5 million and $6 million a year in soft loans to Indonesian businesses initially.

Italy could also help boost the competitiveness of Indonesia's fashion industry by providing designs to local footwear and clothing manufacturers, he said.

"We are going to follow up immediately on (cooperation with Italy in) the leather industry as well," he said.

Iburizal, also the chairman of the Bakrie Group, said Indonesia also hoped to increase exports to Italy, which now accounted for only 0.2 percent of the country's total imports.

Kadin data shows that trade relations between both countries reached $1.95 billion in 1996, up from $1.57 billion in the previous year, all in favor of Italy.

During the first quarter of this year, Indonesian exports to Italy reached $245.1 million, while imports from Italy reached $321.4 million.

Indonesia mostly exports shoes, oil, wood and cork, rubber and synthetic rubber, furniture, coffee, tea, chocolate, spices, yarn, textiles and garments.

Italian exports to Indonesia include industrial machinery, cooling and heating systems, textile and leather machinery, crafts and nonelectric machinery. (das)