Trade surplus with Australia likely to grow
JAKARTA (JP): Indonesia anticipates enjoying another surplus from its bilateral trade with Australia this year due to the continuing decline in Australian exports to Indonesia, the Australian Trade Commission (Austrade) said on Monday.
Senior trade commissioner at Austrade Bruce Wallace said Australian exports to Indonesia were expected to further decline by between 4 percent and five percent this year because Indonesian companies were still facing a scarcity of working capital.
Indonesia's exports to Australia are projected to increase this year as more local companies shift their markets to overseas ones to compensate for sluggish domestic sales.
"We see that Indonesia's exports to Australia continue to grow this year, while Australian exports will continue to contract between 4 percent and 5 percent. However, it is a good chance for Indonesia to strengthen its trade activities," Wallace said.
Indonesia enjoyed a surplus of A$1.41 billion (about US$950 million) in bilateral trade with Australia in 1998, in part due to a sharp increase in exports.
The surplus is the first recorded by Indonesia in the last five years.
Indonesia's exports to Australia surged 57.2 percent to A$3.56 billion last year, while imports dropped by 36.5 percent to $2.2 billion.
Wallace said that despite the crisis, bilateral trade between both countries remained relatively stable at $5.71 billion in value last year, compared to $5.65 billion in 1997.
"Despite the lower imports from Australia, the overall two-way trade between the two countries got bigger last year. This year, despite the expected slight contraction of Australian exports, we predict that the total trade figures will continue to grow."
He said most Australian businessmen still had confidence in Indonesia's economic future, and that very few Australian companies left the country during the economic and political turmoil.
Wallace said major increases in Australian exports to Indonesia in the second quarter of this year were recorded for textile fibers, petroleum products, non-ferrous metals, live animals, aluminium and chemicals.
Some new investors were seeking opportunities to invest in the country, while others had even expanded their businesses.
He acknowledged that since the onset of the current economic crisis, there was evidence of Australian companies increasing holdings in existing joint ventures, and looking actively to buy into new ventures in Indonesia. He said such measures were helped by the Indonesian government's reform program which was greatly liberalizing the economy.
"The government's privatization program is also presenting new opportunities for Australian companies," he said.
However, with the Indonesian economy predicted to contract by 5 percent this year, he suggested Australian businessmen study the market carefully before entering into any trading and investment relationships.
On Monday, Austrade also launched the Business Club Australia, which is part of the Australian government's "Australia Open for Business" program for the Sydney 2000 Olympics.
Wallace said the new project was a two-year business program designed to boost links between international and Australian business under the Olympic banner and to ensure that Australia gained maximum business and benefits from the Games.
He said Austrade Indonesia was hosting four events to launch the business club in Indonesian four key business centers. The club will target businesspeople wanting to capture part of the Olympic magic while accessing trade and investment opportunities in Australia, he added.
"The launch in Indonesia will be held in Jakarta today, Medan on July 2, Surabaya on July 6 and Bali on July 8. It will be directed at more than 1,000 of the highest profile Indonesian businesspeople."
Wallace said club membership included business matching with international members and information on a whole range of Australian business opportunities. (gis)