Trade surplus with Australia likely to grow

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)