RI, Japan to boost economic ties
RI, Japan to boost economic ties
Agencies, Tokyo
President Megawati Soekarnoputri secured a promise on Tuesday from Japanese Prime Minister Junichiro Koizumi to boost economic ties, but no aid pledges, at a time when Indonesia is determined to leave the protection of the International Monetary Fund.
Koizumi said Tokyo and Jakarta should work toward the eventual conclusion of a bilateral economic partnership agreement (EPA).
"Our two nations need to discuss this thoroughly," he was quoted by a Japanese foreign ministry official as saying.
This mandate also includes discussions on resuming talks on an investment agreement that has been suspended for several years, an agreement likely to be crucial for Indonesia.
The two countries also agreed to take an initial step toward a free trade accord.
Japan currently has a free trade agreement only with Singapore, but is in discussions on others with the Philippines and Thailand.
The foreign ministry official said it was still far too early to discuss the content of any possible economic partnership, but that it was envisioned as being "quite broad".
Koizumi and Megawati also agreed that reforms pledged by Indonesia to improve its investment climate would help expand Japanese investment there and in turn further boost the nation's recovering economy.
High on the agenda for Megawati and her Cabinet is ensuring continued Japanese support for Indonesia's economy after the IMF cash stops coming.
Chief economics minister Dorodjatun Kuntjoro-Jakti told Reuters on Monday that he hoped for a long-term commitment from Japan, but officials in Tokyo said Indonesia needed to do more to improve its investment climate, including legal reforms.
Japanese finance minister Masajuro Shiokawa also told Megawati that the prerequisite for Japan's investment in Indonesia post- IMF would be for the nation to implement sound macroeconomic policies.
Japan is Indonesia's second largest trading partner after the United States with Indonesia's non-oil and gas exports to the country reaching US$6.3 billion and Indonesia's non-oil and gas imports from the country totaling $4.2 billion last year. Japan is also the largest foreign investor in Indonesia and the largest creditor to the country.
Japan is also the main buyer of Indonesia liquefied natural gas (LNG).
Prior to her departure to Japan and other countries, oil and gas industry players in Indonesia asked Megawati to lobby the Japanese government to persuade Japanese firms to continue buying LNG from Indonesia.
Several Japanese buyers, including Kansai Electric, Kyushu Electric, Nippon Steel and Tohoku and Tepco, will see their billion dollar contracts with the country's largest LNG plant in Bontang, East Kalimantan, expire in 2010. The contracts with the companies total 10.15 million tons per year.
The result of Megawati's talk with the Japanese government on the issue was still unclear.
Meanwhile, the Japanese Embassy in Jakarta said in a statement made available to The Jakarta Post that on Monday that Japan's Minister of Land and Infrastructure Chikage Oegi signed a tourism cooperation with Indonesian Minister of Tourism and Culture I Gede Ardika, who accompanied Megawati on her visit to Japan.
Both ministers agreed to boost cooperation in tourism by, among other things, promoting mutual visits of their nationals to the two countries.