Despite vast opportunities, business relations between Indonesia and Thailand are still lagging compared to relations with other major Southeast Asian countries.
The Jakarta Post's Rendi Akhmad Witular interviewed the newly appointed Thai ambassador for Indonesia Akrasid Amatayakul about his strategies for boosting business relations between the two countries.
Question: Are there any new guidelines or missions for you after the recent change in Thailand's regime? Answer: Well it's going to be just a continuation of the previous foreign policy; of our big picture policy. Most of the policy will still be the same. We would like to encourage more contact between Thailand and Indonesia in every way to encourage investments.
We have so many Thai investors now in this country, such as Banpu in mining and Charoen Pokphand Group in agro industry.
Petroleum Authority of Thailand (PTT) also has some exploration activities here as well, and is seeking more joint ventures with Indonesian partners.
A lot of other investors are also present here in the chemical, garment, and plastic industry.
We also have Siam Cement Group, which plans to set up a cement factory here. They are still in the planning stage.
There are also Thai companies seeking investment in palm oil and retail businesses, such as ice cream and coffee chains.
Medium-size companies from Thailand are also keen to explore new businesses. An example is in the making of sawdust paper.
Our investment board has just come here to learn opportunities for Thai investors to do business here.
Aside from the economic activities, we are also encouraging people-to-people activities. We are bringing a lot of cultural groups here, and introducing Thai cuisine as well.
What attracts Thai businessmen to expand into Indonesia?
It is the small and medium-size investors that are keen to come here. Big companies are mostly present here already. What attracts Thai investors is that Indonesia has a very big market, and it is a vast country. So there are a lot of opportunities.
A lot of Thai companies are here setting up factories, but the are for the export market and they use Indonesia as a production-base country.
Thai investors are interested mostly in sectors related to agriculture, information technology, chemicals, plastics, fishery, and farming machinery.
Indonesia's government should also promote investment opportunities in provincial areas because a lot of incentives are provided by the local administrations. These incentives vary from one area to the other. So foreign investors need this kind of information in order to make them more aware of the potency.
What are the hurdles in doing business here?
I think mostly related with uncertainty in regulations and insufficient infrastructure. There should be legal consistency here for doing businesses. But there are no critical complaints yet from our investors.
What about Indonesian business in Thailand? How big is it?
For Indonesian investors, there is a very limited presence Thailand. They are mostly engaged in sectors related with rubber plantations and the fishing sector.
Indonesian investors are more interested coming to Singapore and Malaysia because of cultural and geographical proximity. They should learn that Thailand also promises a lot of opportunities, especially in the agriculture sector, property, and the automotive industry.
Thailand and Indonesia are still negotiating toward a new cooperation in fishery operations in the Indonesian territory. Where are discussions are up to?
A memorandum of understanding (MoU) between the two countries needs to take in place because there has been a change in (Indonesian) fishery regulations. The MoU is needed so that we can adjust our practices with the regulations.
I am hoping the MoU can arrange the way we should do business here. There should be a more clearer regulation on who is doing what, and who is authorized to manage this.
We are also proposing the government provide incentives and infrastructure, such as ports, power and water, to encourage our fishing firms to invest here.
So we expect to see those points to be discussed in the next round of negotiations.
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