Indonesian businesses urged to invest in Mexico

Indonesian businesses urged to invest in Mexico

MEXICO CITY (JP): Indonesian businesses are being encouraged
to invest in Mexico as a means of penetrating markets in North
and South America.

"I think investment here has good prospects because the goods
produced here can enter the North American Free Trade Agreement
(NAFTA) countries freely," Indonesian Minister of Industry and
Trade Tunky Ariwibowo said here Thursday.

He said that Indonesia will benefit from investing in Mexico
because it is a member of NAFTA and has several free trade
agreements with other Latin American nations.

Tunky was speaking at a meeting with the local trade and
business communities here Thursday. He called the bilateral
relations between Southeast Asian nations and Mexico the next
logical step in market globalization.

"We think of Mexico as not only a place for profitable, safe
relations, but also as a springboard into the United States and
other Latin American countries," Tunky said.

Meanwhile, Indonesian ambassador to Mexico Usman Hasan said
that Mexico is still recovering from the economic disaster caused
by the devaluation of its peso against the U.S. dollar at the end
of 1994.

"This recovery is a good moment for our businesspeople to
enter Mexico because it has an urgent need to diversify its
export markets and sources of imports and foreign direct
investment," Usman said.

Mexico is heavily dependent on its neighbor to the north: some
48 percent of Mexico's foreign direct investment comes from the
United States, as does 73 percent of its imports. Some 83 percent
of its exports goes to the U.S.

Meanwhile, Mexican Vice Secretary of International Trade
Negotiations Jaime Zabludovsky said that his country has had a
liberal investment regime since the enactment of new investment
law in 1993.

"I do think that Mexico offers Indonesian businessmen and
businesswomen very good opportunities not only to participate in
the Mexican market but also to enter the North American market
through NAFTA and also the Latin American market," Zabludovsky
said.

He noted that Indonesia and Mexico have built up relatively
strong trade relations, but not in the investment sector.

"You export to Mexico electronic parts, plywood and textiles,
and I do think that there are very good opportunities for your
textile and apparel industries to come into Mexico and take up
with the NAFTA," Zabludovsky said.

The Indonesian and Mexican governments are also encouraging
Mexican businesses to enter East Asia through Indonesia.

Mexico's entry into the Asia-Pacific market could be
facilitated by stabilizing trade relations with Indonesia, Tunky
said at a business forum during his two-day trade mission to
Mexico.

In addition to being a gateway to one of the world's most
lucrative trade areas, Indonesia is home to nearly 200 million
people, a wealth of natural resources and a history of prudent
macroeconomic management, he said.

According to the Indonesian government, Indonesia suffered a
US$4 million trade deficit with Mexico last year. According to
the Mexican government, Indonesia enjoyed a trade surplus of
$151.4 million last year.

Tunky said the discrepancy is normal because Mexico's records
of imported Indonesian products include those coming from
Indonesia through third countries.

Indonesian counts its exports to Mexico as those shipped
directly from Indonesia to Mexico. Indonesia records its imports
from Mexico in the same way, as does Mexico when it exports goods
to Indonesia.

"Such a difference in statistics does not matter to me. What
is more important to me is how to export more of our products to
Mexico, either directly or via third countries," Tunky said.

According to Mexico's figures, Mexican products bound for
Indonesia represented less than 0.02 percent of its total exports
of $78.8 billion last year. Its imports from Indonesia were less
than 0.23 percent of its total imports of $72.4 billion.

Trade flow between the two emerging economies dropped to
$151.1 million last year from $211.7 million the year before.

"Hopefully in the next few months we will see significant
changes in our bilateral statistics," Zabludovsky said. "Our two
countries offer too many economic and strategic advantages."
(rid)