Fri, 01 Oct 2010

TEMPO Interactive, Jakarta:Thailand Trade representative, Suthad Setboonsarng, said most of the 18 countries participating in the 2010 Indonesia-Thailand Business Forum and Business Networking Programs are engine producers. This shows Thailand’s high interest in investing in the machinery industry in Indonesia.

However, Suthad cannot yet confirm the investment value in the sector that will be invested in Indonesia because before it is invested, there must be a bilateral agreement which was scheduled to be reached in the business forum. “Delegations from the machinery industry will return to Indonesia for further studies,” he said yesterday.

Suthad said that at present, Indonesia is the third biggest export destination country for Thailand. The products exported to Indonesia include car engines, durian, and other consumption products. Like Indonesia, Thailand’s export destination is no longer directed at traditional markets like the US, the European Union, and Japan, but instead at Asia.

Deputy Trade Minister Mahendra Siregar said the global economic development has shifted, where previously exports were mostly aimed at the northern hemisphere’s market. However, since the crisis, the point of view has changed along with advanced countries’ weakening condition. “We need to see the opportunities in other countries and utilize diversification with fellow developing countries,” he said.

Mahendra further said that Thailand apparently shared a similar view. As such, the Indonesian government tried to facilitate a business forum initiated by the Thai government. One of them was the Indonesia-Thailand Business Forum and 2010 Business Networking Program. This activity is expected to sharpen the delegations’ understanding about the Investment Law and tax regulations and policies in Indonesia. The delegations were also given the chance to look into business potential in Indonesia, like franchises and agricultural products.

Throughout last year, Indonesia recorded a trade deficit with Thailand amounting to US$ 1,38 million. The deficit was mostly contributed by the non-oil and gas sector. The Trade Ministry’s data showed that non-oil and gas imports from Thailand last year totaled US$ 4,6 million, exceeding Indonesia’s non-oil and gas export value to Thailand, totaling US$ 2,6 million.

Meanwhile, during the first five months of this year, Indonesia’s trade deficit was US$ 1,17 million. The import value from Thailand was US$ 2,9 million, or more than the non-oil and gas export value to Thailand totaling US$ 1,490 million.

As for the trade in the oil and gas sector, Indonesia experienced a surplus over Thailand. In 2009, oil and gas exports to Thailand amounted to US$ 635.000, exceeding the oil and gas import value from Thailand which was only US$ 42.000. During January to May 2010, Indonesia also had a surplus in oil and gas trade because the oil and gas export value to Thailand was US$ 349.000, exceeding that from Thailand, amounting to US$ 17.000.