RI businesses told to be more outward looking
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.