PAK INDONESIA ECONOMIC RELATION
Direct shipping and air links for two way trade
From SHAMIM AHMED RIZIV,
Sep 01 - 07 , 2003
The visit of Indonesian Minister for Trade and Industry to Pakistan last week and her intensive discussions, apart from her Pakistani counterpart and senior officials of the Ministry, with relevant trade and business organizations has opened new avenues of purposeful economic co-operation with Indonesia.During this visit Pakistan Indonesia agreed to sign a free trade agreement within next 3 to 6 months to promote bilateral trade and enhance industrial cooperation. The two sides reached an understanding that they would initiate a process to establish Comprehensive Economic Partnership (CEP), the first step towards signing the FTA.
Speaking at a meeting with Pakistan Chambers of Commerce and Industry, the Indonesian Trade Minister Mrs. Rini M. Sumaro Soewandi, offered to buy sugar from Pakistan as her country was deficients in sugar production by about 50 per cent of its requirement and establish a palm oil refinery in Pakistan through a joint venture with a Pakistani partner. She said that establishing of palm oil refinery would open the way for increasing palm oil exports to Afghanistan and other Asian countries in the region.
She said that during her stay in Islamabad she would take up with Pakistani authorities, the matter of having direct shipping and air links between Pakistan and Indonesia. Without having direct air and shipping links chances of boosting two way trade is bleak. She said, "I believe there is much reason for us to work together to target opportunities for business between our two countries. We would like to encourage Pakistan to import more from Indonesia and we will be happy to receive more imports from Pakistan.
"I encourage the business communities of our two countries to maximize trade opportunities currently being supplied from other countries. In particular, Indonesia believes it can supply to Pakistan a broad range of agricultural products, particularly palm oil, vegetables fats and oil, natural rubber, animal and vegetable oil and cocoa".
The Indonesian Minister said that her country has set up a national task force to facilitate Foreign Direct Investment (FDI). In the industrial sector, investors will find many attractive areas of opportunity, like food processing, pharmaceuticals, chemicals, wood, furniture, pulp and paper, electronics, automobile, textiles and garments all offer good business. In the service sectors, prime opportunities exist in trading, transportation, warehousing, telecommunications, recreational and entertainment services and technical and engineering services.
A joint statement issued by the two ministers said the CEP would eventually lead to the FTA. For this purpose, both the sides would establish a task force/technical team to identify mutually beneficial products/commodities for a jump-start.The two sides agreed to reduce tariff and eliminate non-tariff barriers to facilitate promotion of trade and industrial corporation. It was also agreed that cooperation at the chambers of commerce and industry level would be enhanced to bring private sector of the two countries closer.
In this regard, both the countries would exchange business information and trade delegations, enhance people-to-people contacts. The statement said that the two countries also agreed to cooperative in quality control and standardization both on agriculture and non-agriculture levels.
Indonesia and Pakistan recognized that both countries have great potential to enhance mutual trade and industrial cooperation for which the two sides would encourage their institutional and business communities to explore ways and means. The two countries also agreed to resolve trade dispute through consultation.
One significant feature of the joint statement is reference to the agreement for co-operation in quality control and standardization both in agricultural and non-agricultural spheres. Notable, as well, should be the emphasis on co-operation at the level of chambers of commerce and industry, thereby, understandably focusing effectiveness of the private sector in the attainment of the goals of the agreement.
It will thus be noted that having identified areas of trade and industrial co-operation, Pakistan and Indonesia would encourage the private sector to explore ways and means of putting the agreement to full use. Quite some idea of the keenness on the part of Indonesia for really purposeful economic co-operation with Pakistan may also be had from the visiting Indonesian Commerce Minister's remark that her country meets 50 per cent of its sugar needs from import and that Pakistan should take advantage of its as also from the hint she dropped of her country's willingness to seek Pakistan's help for the promotion of sugar industry. Reference, in this regard, may also be made to agreement reached for promoting direct purchase of palm oil from Indonesia.