Indonesia eyes South Asia to expand and diversify its exports

Jakarta (ANTARA News) - Indonesian President Joko Widodo (Jokowi)s recent tour of five South Asian nations has significant meaning not only to foster friendship but also to increase trade with the countries.

The president started the six-day tour by visiting Sri Lanka on January 24. He later proceeded the journey to India, Pakistan, Bangladesh, and Afghanistan.

South Asia, which is home to over 1.3 billion people offers large market for a variety of export goods and services thanks to its robust growth.

According to a World Bank report, South Asia remains the fastest growing region in the world, with economic growth projected to gradually accelerate 7.3 percent in 2017 from 7.1 percent a year earlier.

The region also shows resilience in the face of turbulent global markets, the report said.

However, Indonesia has yet to take optimum advantage of the region to expand and diversify the market for its exports.

In the past few years, Indonesia has always recorded a surplus in its trade with South Asia, particularly India and Pakistan.

Trade between Indonesia and India jumped to US$16.55 billion in the January-November 2017 period from US$12.98 billion in 2016, while Indonesias trade with Pakistan rose to US$2.38 billion in January-November 2017 period from US$2.17 billion in 2016, according to the Indonesian Trade Ministry.

Indonesia also saw a 25.96 percent increase in its trade with Bangladesh to US$1.53 billion in the January-November 2017 period as compared to US$1.33 billion the year before.

Indonesias exports to India mostly comprise coal, palm oil, rubber and tin, while its exports to Pakistan are dominated by palm oil and its exports to Bangladesh include palm oil, chemical wood pulp, coal, staple fiber yarn, tyre and paper.

In an effort take optimum advantage of the South Asian market, Indonesian Trade Minister Enggartiasto Lukita led a 43-member trade mission to India on January 25-26 and a 23-member trade mission to Pakistan on January 26-27, coinciding with President Jokowis visit to the two countries.

While in India, the trade mission used the momentum of ASEAN-India Business and Investment Meet and Expo. The participation of the trade mission in the event is part of efforts to make approaches to conclude negotiations on Regional Comprehensive Economic Partnership (RCEP) as a follow up to the inter-session meeting of ASEAN economic ministers held in Singapore some time ago.

RCEP involves 16 countries, which make up of half of the worlds population. The 16 countries consist of 10 ASEAN member states (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and six partner countries (Australia, China, India, Japan, South Korea, and New Zealand).

"As the coordinator of RCEP and on behalf of ASEAN economic ministers, we held talks with Indian Trade and Industry Minister, Suresh Prabhu to get Indias commitment to jointly conclude negotiations on RCEP in 2018," Lukita said.

The conclusion of the negotiations on RCEP is expected to create more jobs for the younger generations, encourage sustainable growth and inclusive development, and promote innovations to improve the standard of living.

In a series of trade missions to Pakistan, Lukita and Pakistani Textile Industries and Trade Minister Mohammad Pervaiz Malik witnessed the signing of a memorandum of understanding (MoU) between the Indonesian Chamber of Commerce and Industry (Kadin) and the Federation of Pakistan Chamber of Commerce and Industry (FPCCI).

The MoU is aimed at encouraging businesses of both countries to increase trade and information exchange. Meanwhile, in a business forum and one-on-one business matching, there were more than 100 Pakistani business actors to meet directly and do business with their Indonesian counterparts.

"Business actors of both countries could interact and discuss the demanded products," Lukita said.

Indonesia and Pakistan also agreed to establish cooperation in the field of promotion. The agreement is an initial effort to enhance the trade relations between the two nations and improve information exchange.

"The information exchange and promotions are the scope of the agreement, some of which include business opportunity and promotions by encouraging the involvement of the private sector from both countries," Director General of National Export Development (PEN) at the Indonesian Ministry of Trade, Arlinda, said.

The trade cooperation between Indonesia and Pakistan began in 2005 at a signing of Framework Agreement on Comprehensive Economic Partnership. The trade relation with Pakistan is a perspective and an opportunity to develop the Indonesian market.

Indonesia sees there are further opportunities through geostrategic aspect of Pakistan and its neighboring countries in Central Asia.

During President Jokowis visit in Bangladesh, Lukita and his Bangladeshi counterpart, Tofail Ahmed, signed "A Joint Ministerial Statement on the Launching of the Negotiations for Indonesia-Bangladesh Preference Trading Arrangement(PTA)".

"So far, Indonesia has only relied on several key products in its exports to Bangladesh. But with the adoption of PTA, we hope we can diversify and increase our exports since Bangladesh which has a population of almost 160 million offers quite large market," Lukita said.

Indonesia is expected to start the first negotiations for the PTA in the first half of 2018.

Source: ANTARA News

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