Sun, 05 Dec 2010


TAIPEI -- Recently improved relations between Taiwan and China have enhanced Taiwan's trade ties with Indonesia, but no formal talks have been launched on the possibility of Taiwan investing in an Indonesian island, said Andrew Hsia, Taiwan's top envoy to Indonesia, last week.

Earlier this year, Indonesian President Susilo Bambang Yudhoyono through his ministers invited Taiwan to invest in Moratai Island, an island one-15th the size of Taiwan, with an area of 2,400 square kilometers on the northern tip of Indonesia.

The proposal was made to Taiwan's economics minister Shih Yen-shiang, who led a delegation of over 100 people to Indonesia in October to study the Southeast Asian country's economic and trade environment.

Hsia, who has visited Moratai, said the sparsely populated island of roughly 50,000 people is a prime location for investments in fishery, agriculture, light industry, and tourism because it does not experience typhoons or cold fronts.

Once the former military headquarters for U.S. General Douglas MacArthur during World War II, the remote islet is equipped with a seven-runway airport, which adds to its appeal, Hsia said.

According to some newspaper reports, the deal could be cemented in early 2011. However, Hsia insisted no timeline has been set.

“Both sides are carefully evaluating the options. There are still many outstanding issues to be assessed such as what are the collective interests in this project and what mutual benefits might arise from this collaboration,” said the former deputy foreign minister, adding that both sides are still mulling over the details.

While crediting warming China-Taiwan relations as a key factor in the improved Taiwan-Indonesia ties, the representative said a formal trade pact with Jakarta still remains in the far distance.

“Both sides are very positive about our current trade relationship, but we are still not at a stage where we can even begin to discuss a free trade agreement,”he said.

As the largest economy in Southeast Asia, Indonesia has long been viewed favorably by Taiwanese investors, especially after the formation of an ASEAN-China Free Trade Area which went into effect on Jan. 1 this year.

Indonesia is Taiwan's 10th largest trade partner. Taiwan's investments in Indonesia have amounted to over US$13.9 billion.

Taiwan is also the most popular destination for Indonesian overseas workers due to its higher salary and good benefits, said Hsia.

According to the Council of Labor Affairs, there are around 150,000 Indonesian workers in Taiwan, which accounts for 40 percent of Taiwan's foreign labor force.

On a people-to-people level, Taiwan and Indonesia share close ties. Last week, the Indonesia city of Singkawang became a sister city of Taoyuan County's Yangmei City.

During the initial aftermath of the recent volcanic eruptions in Indonesia's Mount Merapi, Taiwanese compatriots in Indonesia donated blankets, slippers, and T-shirts to the local residents. The combined money donated from the Taiwanese government and Taiwanese public reached over US$370,000.