'Taiwan's economic relations with Indonesia are improving

Veeramalla Anjaiah, The Jakarta Post, Jakarta

Taiwan, the archrival of China, has succeeded in improving economic relations with Indonesia at a faster rate than on the political front, where the island nation has been stymied by Jakarta's "One China" policy.

"Taiwan's relations with Indonesia are cordial and comprehensive. We have been cooperating with each other in various sectors including agriculture, fisheries, tourism, labor and industrial sectors," Taiwan's economic and trade representative David Y.L. Lin said during a press briefing on Sunday in Jakarta.

Taiwan has neither an embassy in Jakarta nor an official diplomatic relationship with Indonesia.

China, the world's most populous nation and a permanent member of the United Nations Security Council, says Taiwan is still part of China and strongly opposes any country that tries to establish diplomatic ties with its "renegade province". And Indonesia, which has cordial relations with China, does not want to get involved in the rivalry between China and Taiwan.

Yet, thanks to its "go-south policy" and all-out efforts, Taiwan has emerged as an important economic partner of the world's most populous Muslim nation.

The "go-south policy" was designed and pursued by present Taiwan's President Chen Shui-bian to encourage Taiwanese businesspeople to invest in Southeast Asian countries, including Indonesia, instead of China.

"The total volume of our bilateral trade in 2003 reached US$4.4 billion or increased 9.5 percent from the previous year. Indonesia enjoyed a trade surplus of $1.41 billion in 2003 or an increase of 25.1 percent compared to 2002," Lin, who assumed his post just four months ago in Jakarta, said.

Being the fifth-largest foreign investor, with a total cumulative amount invested of $13 billion as of the end of 2003, Taiwan has been providing employment for thousands of Indonesians through its 962 projects. The companies, like Pao-cheng Shoes Co., ACER Bank Chinatrust, Na Ya Plastics, President Food and RSEA are some of the major Taiwanese companies that are involved in Indonesia.

"Though in recent times the focus of Taiwan has slightly moved to Vietnam due to its inexpensive labor and better investment climate, Indonesia is still an important destination for our investors, Lin said.

While commenting further on the investment climate in Indonesia from Taiwan's perspective, Lin said the rupiah's stability was the most important factor in investment considerations. The increasing wages are a real concern for most investors.

Putting aside the problems of a poor investment climate, including the security issue -- especially after the Bali Bombing in 2002 -- a large number of Taiwan tourists are flooding Indonesia.

"Around 300,000 Taiwan tourists visit Indonesia each year. With 42 flights per week, there are three Taiwan airlines flying between Taiwan and Indonesia," Lin said.

Taiwan employs around 56,000 Indonesian workers in household, health, industrial and construction sectors.

"Actually, we do not have any problem with the Indonesian government and we respect their policy on China. We do not understand why China always protests whenever a minister or official delegation from a country, which do not have diplomatic ties with Taiwan, visits Taipei," Lin said.

For example, ministers from Germany, which do not have diplomatic ties with Taiwan, have visited Taipei several times.

Taiwan has diplomatic relations with 27 countries from all over the world and economic and trade representative offices in more than 100 countries.

Lin also commented on the latest presidential elections, which according to him, were conducted freely and fairly. The incumbent president Chen's reelection was a democratic achievement for Taiwan.

The latest elections were monitored by independent observers from various countries including Indonesia. The Habibie center, a think tank established by Indonesia's former president B.J. Habibie, sent a team of observers under the leadership of Dewi Fortuna Anwar, a research scholar, to Taiwan to monitor the election.

Lin hopes that his country, which has investments totaling more than $100 billion in mainland China, and Beijing will engage in more dialog to improve the relations between the neighbors.