RI, Saudi to double trade to $1b

Zakki P. Hakim, The Jakarta Post/Jakarta

Indonesia and Saudi Arabia expect to double their bilateral trade of non oil and gas commodities to $1 billion next year, a senior official said on Friday.

Minister of Industry and Trade Rini MS Soewandi said that the two countries made the commitment during her visit to Saudi Arabia earlier this week.

"Saudi's minister of commerce and industry expressed his country's intention to improve the two nations' trade ties," Rini told reporters after the opening ceremony of the new National Agency for Export Development (NAFED) building.

The two countries should have a far closer trade relationship given their centuries-old ties, she said.

Rini said she and her counterpart agreed to push for the establishment of at least three joint ventures between Saudi and Indonesian businessmen that will first focus on garment manufacturing and food processing.

Indonesia imports oil from Saudi, while exporting textiles, garments and plywood. Last year, Indonesian non-oil and gas exports to the world's largest oil producer only reached US$400 million.

The Saudis were also interested in investing in resorts in Indonesia, as Saudi tourists now feel more comfortable traveling to Asia than to the U.S. and Europe given the tight checks by the U.S. and European immigration offices on visitors from the Middle East.

"Malaysia has been taking the most profit out of the trend," said Rini.

Rini said that a Saudi trade mission would come to Jakarta in mid-October with the purpose of studying the possibility of the joint ventures.

According to Rini, many Indonesian goods could not enter the Saudi market for failing to meet the standards set by the nation.

But, the Saudi government promised to provide easier market access in appreciation for Indonesia's promise to support Saudi's bid to join the World Trade Organization.

Rini said that during her visit she also met with the president of Islamic Development Bank (IDB), who agreed to provide facilities such as Letter of Credit for Indonesian companies exporting to Saudi.

IDB might also provide working capital for troubled state- owned airplane maker PT Dirgantara Indonesia, she said.

Rini told the IDB officials that Dirgantara had received several orders from British Aerospace and Boeing, but had no working capital to finish the job, she said.

"So I asked whether or not IDB was interested to provide loans. They said they were interested," said Rini.

Soaring world oil prices have provided Saudi, as the biggest oil producer in the world, with a huge budget surplus that experts claimed could be as high as $35 billion, making the country an irresistible export destination.