Thu, 11 Mar 2010


By Marion Rae and Nichola Saminather
March 11 (Bloomberg) -- Indonesian President Bambang Susilo Yudhoyono said expanding trade links with Australia is an opportunity for companies to invest in his country’s energy-rich eastern region.

Yudhoyono, speaking to business leaders in Sydney today on the final day of his three-day visit to Australia, said he agreed in talks with Prime Minister Kevin Rudd that there’s room to grow trade relations. Indonesia is Australia’s 13th-largest trading partner.

“The emphasis will be on six provinces in the eastern part of Indonesia” the president said, referring to Papua, Papua Barat, Maluku, West Nusa Tenggara, Bali, and East Nusa Tenggara, which includes West Timor and is positioned near the oil- and gas-rich Timor Sea. The focus will be on “food security, energy security and infrastructure building,” he said.

About 400 Australian companies operate in Indonesia, the world’s most-populous Muslim nation, including those in the mining, construction, banking, transport and food and beverage industries. Indonesia has the Asia-Pacific’s largest proven natural gas reserves and one of the world’s largest thermal coal resources.

Australia is Indonesia’s 12th-largest investor, excluding oil and gas, Yudhoyono said, and “this is a statistic that we can improve.”

The leading investors in Indonesia are Japan, South Korea, Taiwan and Indonesia’s neighbors in Southeast Asia.

Australia and Indonesia have concluded a feasibility study into a free-trade agreement and are “now considering the next steps,” Rudd said yesterday after talks in Canberra. “We share the goal of increasing the volume of bilateral trade and investment.”

Energy Needs

Indonesia is tackling its immediate need for power generation with a 10,000 megawatt project now in progress and another 10,000 megawatt development that will begin soon, Yudhoyono said.

The country is investing in infrastructure building and Yudhoyono said he is confident private investors will enter partnerships to complete projects, helped by cuts to tax and customs costs, revamped registration and streamlined licensing.

--Editors: Paul Tighe, Dave McCombs