RI, Libya to engage in countertrade deal
RI, Libya to engage in countertrade deal
Evi Mariani, The Jakarta Post, Jakarta
Indonesia and Libya have agreed on a countertrade deal worth
US$540 million under which the Indonesia would export 16
commodities in exchange for crude oil, a senior official said.
The agreement was signed on Aug. 25 during a visit to Libya
led by Minister of Industry and Trade Rini M.S. Soewandi.
"The agreement has to be realized by the end of this year,"
the ministry's Director General for Foreign Trade Sudar S.A. told
a press conference on Friday.
He explained Indonesia would import 50,000 barrels of crude
oil per day for a full year from Libya, which in return would
import commodities like textiles and garments, footwear,
toiletries, tea, coffee, seasoning, timber, furniture,
plasticware, paper and stationery, electronic goods, tires,
rubber products, vegetable oil, auto parts and aircraft.
"Based on an assumption that the international crude oil price
stands at US$30 on average per barrel, the countertrade is worth
around $540 million," he added.
Next week, a joint committee between Libya and Indonesia will
discuss the details. According to the agreement, the committee
has to finish discussing the details by the end of this year. If
it fails, the agreement will be terminated.
Sudar said the country's exporters were invited to sell their
products through the countertrade program.
"We have appointed Perusahaan Perdagangan Indonesia (PT PPI)
to administer the export system in the countertrade deal," he
said.
PT PPI is a state-owned trading company handling the import of
certain commodities like liquor and the export of products
particularly from small and medium-scale enterprises (SMEs). The
company was formed through a merger earlier this year of three
state-owned trading companies PT Dharma Niaga, PT Cipta Niaga and
PT Pantja Niaga.
Sudar was optimistic that the country's exporters could
fulfill the large demand from Libya, saying that Indonesian
producers were experiencing over production.
In 2002, Indonesia booked $5.8 million in exports to Libya,
mostly from selling automobile tires, steel cables, electronic
goods, textiles, garments and soap.
Meanwhile, Libya's exports to Indonesia reached $29,000 from
the sale of oil and iron ore.
If the agreement is realized, it will help increase the
country's exports, which for this year are targeted to reach $4.7
billion.
Besides visiting Libya, Rini also visited Pakistan, meeting
trade minister Humayun Akhtar Khan and discussing the possibility
of implementing a free trade area between the two countries.
"Indonesia and Pakistan will form a forum called 'Closer
Economic Partnership' that will be the embryo of a free trade
agreement," said Sudar.
Besides the forum, the two countries will also form a team to
identify products to be included in the planned free trade pact.
In 2002, Indonesia's exports to Pakistan reached $264.9
million. mostly from palm oil, paper, textiles, garments, tea,
electronics goods and chemicals.
Meanwhile, imports from Pakistan in 2002 reached $85.3 million
from purchasing rice, beans, textiles, cotton and leather.
Evi Mariani, The Jakarta Post, Jakarta
Indonesia and Libya have agreed on a countertrade deal worth
US$540 million under which the Indonesia would export 16
commodities in exchange for crude oil, a senior official said.
The agreement was signed on Aug. 25 during a visit to Libya
led by Minister of Industry and Trade Rini M.S. Soewandi.
"The agreement has to be realized by the end of this year,"
the ministry's Director General for Foreign Trade Sudar S.A. told
a press conference on Friday.
He explained Indonesia would import 50,000 barrels of crude
oil per day for a full year from Libya, which in return would
import commodities like textiles and garments, footwear,
toiletries, tea, coffee, seasoning, timber, furniture,
plasticware, paper and stationery, electronic goods, tires,
rubber products, vegetable oil, auto parts and aircraft.
"Based on an assumption that the international crude oil price
stands at US$30 on average per barrel, the countertrade is worth
around $540 million," he added.
Next week, a joint committee between Libya and Indonesia will
discuss the details. According to the agreement, the committee
has to finish discussing the details by the end of this year. If
it fails, the agreement will be terminated.
Sudar said the country's exporters were invited to sell their
products through the countertrade program.
"We have appointed Perusahaan Perdagangan Indonesia (PT PPI)
to administer the export system in the countertrade deal," he
said.
PT PPI is a state-owned trading company handling the import of
certain commodities like liquor and the export of products
particularly from small and medium-scale enterprises (SMEs). The
company was formed through a merger earlier this year of three
state-owned trading companies PT Dharma Niaga, PT Cipta Niaga and
PT Pantja Niaga.
Sudar was optimistic that the country's exporters could
fulfill the large demand from Libya, saying that Indonesian
producers were experiencing over production.
In 2002, Indonesia booked $5.8 million in exports to Libya,
mostly from selling automobile tires, steel cables, electronic
goods, textiles, garments and soap.
Meanwhile, Libya's exports to Indonesia reached $29,000 from
the sale of oil and iron ore.
If the agreement is realized, it will help increase the
country's exports, which for this year are targeted to reach $4.7
billion.
Besides visiting Libya, Rini also visited Pakistan, meeting
trade minister Humayun Akhtar Khan and discussing the possibility
of implementing a free trade area between the two countries.
"Indonesia and Pakistan will form a forum called 'Closer
Economic Partnership' that will be the embryo of a free trade
agreement," said Sudar.
Besides the forum, the two countries will also form a team to
identify products to be included in the planned free trade pact.
In 2002, Indonesia's exports to Pakistan reached $264.9
million. mostly from palm oil, paper, textiles, garments, tea,
electronics goods and chemicals.
Meanwhile, imports from Pakistan in 2002 reached $85.3 million
from purchasing rice, beans, textiles, cotton and leather.