RI businesses told to be more outward looking
By Riyadi
BANGKOK (JP): Large Indonesian businesses should focus on overseas markets to help improve nonoil exports, the Indonesian Chamber of Commerce and Industry said yesterday.
The chamber's chairman, Aburizal Bakrie, said here that most large Indonesian businesses focused their marketing efforts on the domestic market.
"Sometimes I envy the way our neighbors, especially Malaysia and Thailand, have been encouraging their businesses to zero in on export markets," Aburizal said.
He said Malaysia and Thailand had long opened their domestic markets and encouraged their businesses to invest internationally through investment ventures and trade networks.
"Malaysian Prime Minister Mahathir Mohammad told Malaysian businesspeople a long time ago to look out for the overseas business opportunities," Aburizal said.
Aburizal is touring several ASEAN nations to promote the first ASEAN business summit which will be held in Jakarta next month.
The summit will gather business and government leaders from ASEAN countries and ASEAN's major trading partners.
ASEAN groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Indonesia's Ambassador to Thailand Isbandi Gondo said the Thai government had encouraged local businesses to sound out overseas business opportunities.
"Thailand, especially its private sector, has built up a significant capital base and technology and marketing networks to enable them to invest abroad, including in Indonesia," Isbandi said during a meeting with chamber executives.
But Indonesia has let its domestic markets remain protected from foreign competition, benefiting only certain groups of businesses, Aburizal said.
"It is true that we can capitalize on our domestic market, but we should also build up our export capability through networking," he said.
He said the government should open protected sectors to new entrants and let foreign firms work in these sectors through joint ventures.
This would force protected local firms to become more competitive, he said.
The government should slowly open up its agricultural sector, which was an increasing burden to Indonesia's international trade, Aburizal said.
Indonesia used to have a trade surplus with Thailand but started suffering deficits two years.
Deficit
In 1990 Indonesia had a US$47.7 million trade surplus with Thailand. In 1991 it was $10 million, in 1992 $9.1 million, in 1993 $315.2 million and in 1994 $12.6 million.
But in 1995 it suffered a $135.1 million deficit and last year a $93.4 million deficit.
Indonesian embassy economic division head Jacobson said the 1995 and 1996 deficits were because Indonesia was importing more and more rice and sugar from Thailand.
Rice and sugar imports made up almost 50 percent of Indonesia's imports from Thailand.
Besides agricultural products Indonesia imports electronic parts, including cathode ray tubes, and chemical products like terephthalic acid from Thailand.
Indonesia exports coal, crude oil, fish, yarn, diesel fuel, herbicides, machinery and construction services to Thailand.
Last year Indonesia tried to reduce its trade deficit with Thailand by initiating a counter trade. Indonesia traded aircraft for Thai glutinous rice. The counter trade was worth $36 million.
"If we could have maintained self sufficiency in rice and sugar, we would have enjoyed large surpluses in our trade with Thailand," Jacobson said.
Indonesia imported 110,000 tons of rice from Thailand last year, of which 20,000 tons were glutinous rice.
Jacobson was confident Indonesia would balance its trade with Thailand soon by exporting a greater variety of products.
He said Indonesia could still increase coal exports to Thailand and could export natural gas. Piping natural gas from the Natuna gas field in Riau is being considered.