Trade and economic ties of France, RI weather changes
Trade and economic ties of France, RI weather changes
Trade between France and Indonesia has grown steadily over the
past decade and reached a peak of 14.7 billion French francs (FF)
in 1997 (US$2.5 billion), when French exports were boosted by the
delivery of four Airbus A330 to Garuda. The slowdown, and then
the recession of Indonesia's economy as a result of the Asian
crisis had dramatic consequences on trade relations with all its
major partners. Indonesia's total imports fell 34.4 percent in
1998, from $41.7 billion to $27.3 billion. Its trade surplus with
the rest of the world soared from $6.9 billion in 1996 to $11.8
billion in 1997, and $21.5 in 1998.
In this context, the pattern of bilateral trade relations
between France and Indonesia recorded a major shift in 1998.
French exports in Indonesia dropped by 71.3 percent compared to
1997 (59.6 percent excluding aircraft), while Indonesian exports
to France increased by a healthy 9 percent to reach a historic
peak of FF 6,571 million. Indonesia benefited from a strong
depreciation of the rupiah and from the growth of the French
economy, translating into a stronger demand for imported goods.
In the span of one year, the trade balance between France and
Indonesia went from a surplus of FF 2,658 million in favor of
France to a deficit of FF 4,075 million, which ranks 11th in the
classification of France's bilateral trade deficits (and fourth
in Asia after Japan, China and Malaysia).
In 1998, Indonesia was ranked Frances 56th customer, with a
trade flow representing 0.14 percent of France's total exports,
and its 33rd supplier, providing 0.39 percent of France's total
imports.
French exports to Indonesia are highly diversified, and
concentrate for the most part in industrial goods. France's main
exports to Indonesia are electrical equipment, electronics,
telecommunications equipment, machinery, chemicals, automotive
components, steel tubes, pharmaceuticals, food and agricultural
products.
Indonesian exports to France are concentrated on a smaller
number of products, particularly shoes, textiles and garments,
plywood, rubber, consumer electronics, furniture, toys, coffee
and cocoa. Textile and garments are Indonesia's main exports to
France, and represent 26 percent of total exports, followed by
food products, 17 percent, shoes, 14 percent, furniture, 14
percent, and consumer electronics, 13 percent.
Although bilateral trade figures will remain well below their
potential level till Indonesia's economy recovers, they are
expected to catch up strongly afterward. During the crisis,
French investment in Indonesia has proved resilient, and only a
very limited number of French companies have closed their
subsidiaries, generally representative offices that can be
reactivated when the economy picks up. French investors in
Indonesia are, generally, large companies, with resources to
weather the crisis, and a long-term vision of their presence in
the country. Some have even intensified their efforts during the
crisis, notably in the distribution and water sectors. Others are
evaluating investment opportunities offered by a privatization
program and the restructuring of Indonesian conglomerates.
Table: France-Indonesia Bilateral Trade (in million FF)
French Exports Indonesian Exports
Year to Indonesia to France Trade Balance
---------------------------------------------------------
1990 2,819 2,940 -121
1991 3,728 3,617 +111
1992 6,619 4,265 +2,354
1993 4,549 4,582 -33
1994 4,169 4,472 -303
1995 5,173 4,537 +636
1996 6,513 5,148 +1,365
1997 8,685 6,027 +2,658
1998 2,496 6,571 -4,075
Source: French Customs