These two regions are considered potential markets that Indonesia is keen to explore further, especially to restore its economy, which has been pummeled by the COVID-19 pandemic.
The first business forum with Central and Eastern Europe (INACEE Business Forum) on October 7, 2021 and the third business forum for Latin America and the Caribbean (INA-LAC Business Forum) on October 14-15 were very important for revitalizing trade and investment relations and boost economic cooperation, officials said.
“As we try to recover stronger from the pandemic, one thing is for sure, a business-as-usual approach will not cut it. We need to explore innovative ways to accelerate our recovery and dig deeper into untapped potential,” Foreign Minister Retno Marsudi said.
In order to do so, Indonesia is encouraging its partners in Europe and Latin America to restore connectivity and global movement of goods, services, and people by exploring a travel corridor arrangement for essential business travelers followed by similar arrangements for tourists, she informed.
Critical to such endeavors of mutual recognition are vaccine certification and travel guidelines for the movement of people between Indonesia and countries in Central and Eastern Europe as well as in Latin America and the Caribbean, she said.
Indonesia has also invited countries from Europe and Latin America to explore the untapped potential in trade relations by looking in other prospective areas and utilizing available tools to enhance economic relations such as MoUs (memorandums of understanding) and trade agreements, she said.
Indonesia has also continued to promote digital economy that can help businesses to connect with each other, converting prospects into leads and leads into business deals, she added.
Trade Minister Muhammad Lutfi said he believes there is huge potential for trade between Indonesia and Central and Eastern Europe that can drive the nation's exports.
"Nations in Central and Eastern Europe are some of Indonesia's potential trading partners. As a matter of fact, some of them were recorded to be the nation's top 30 primary export destinations," the minister noted in a video presented at the opening of the INACEE Business Forum.
Lutfi deemed that the business forum activity offered an important momentum to intensify economic relations with countries in Central and Eastern Europe.
"We asserted Indonesia's commitment to strengthening trade cooperation with those regions once more. I encourage entrepreneurs in Central and Eastern Europe to further explore business in Indonesia," he expounded.
During the January-August 2021 period, Indonesia's export value to Central Europe grew about 23.6 percent (YoY) to reach US$2.52 billion, he said.
Meanwhile, its exports to Eastern Europe swelled by 58.07 percent (YoY). Its primary export products to the region were rubber, steel, palm oil and its fractions, copper ore, tin, footwear, wood, and charcoal, he added.
The INACEE Business Forum is a series of trade, investment, and tourism promotional activities that are aligned with the INA- LAC Business Forum 2021 as well as Trade Expo Indonesia 2021, he said.
The total trade value reflects an increase of 6.45 percent compared to trade of US$7.75 billion (Rp110.4 trillion) recorded in 2019, he noted.
However, Indonesia’s market share in the total imports of Latin America and the Caribbean is just 0.5 percent, he pointed out. That means, in Southeast Asia region, it is below Malaysia, Vietnam, Thailand, Singapore in trade with the two regions, he added.
“This is a big untapped potential of trade between our countries,” Lutfi noted.
Referring to the complementary economic scope of Indonesia and the Latin American region, Lutfi said there are many sectors that can be further explored.
Indonesia needs more agricultural products, resource-based products, manufacturing good products and services from Latin America and the Caribbean countries, he informed.
Meanwhile, Indonesia can provide a variety of processed-food products, intermediate goods, and manufactured goods as well, he said.
“We believe that in order to strengthen our trade cooperation, not only we need to sell more, but we also need to buy more,” he added.
Considering that the coronavirus pandemic is still limiting physical interaction, the Indonesian Foreign Ministry organized the two business forums using digital platforms to facilitate virtual trade, investment, and tourism interactions, he noted.
The website ina-access.com features 4,355 export-ready products from 800 companies, half of which are from MSMEs, as well as 133 investment projects from 11 sectors that have been curated by the government, he informed.
By accessing the platform, it is hoped that businesses can find products of interest and can directly interact and cooperate with their partners amid the limitations placed by the pandemic, he said.
"We are taking advantage of this pandemic situation as a momentum to conduct business virtually and we are also taking advantage of the rebound in economic growth," the ministry’s director general of America and Europe, I Gede Ngurah Swajaya, noted.
Indonesia's initiative to strengthen economic cooperation with countries in Central and Eastern Europe, as well as in Latin America and the Caribbean, has yielded positive results, he said.
In the first INACEE Business Forum, business deals worth US$2.9 million were recorded, while the INA-LAC Business Forum resulted in business deals of around US$87.96 million, he informed.
The value of the business deals reached in this year's INA-LAC Business Forum increased from the previous year's US$70 million, he said.
“This is a good start to take advantage of the momentum of economic recovery. Because even though we are in the midst of a pandemic, last August we recorded the highest export record (to Latin America and the Caribbean) in the last 20 years," Ngurah pointed out.
Until the third quarter of 2021, the Trade Ministry recorded positive growth in Indonesia's exports to Latin American and Caribbean countries, with the value of exports reaching US$1.7 billion, an increase of 54.8 percent compared to the same period last year, he said.
Meanwhile, Indonesia's imports from the region also showed a positive growth of 4.17 percent year on year, he added.
Efforts to improve economic relations with Latin America have been supported by the Comprehensive Economic Partnership Agreement between Indonesia and Chile (IC-CEPA), which has been in effect since 2019, he said.
Currently, Indonesia is also in the process of pre-negotiating the establishment of a CEPA with the Mercosur—a trading block that includes Argentina, Brazil, Paraguay, Uruguay and Venezuela, he informed.
The optimization of digital technology can also help Indonesia to overcome geographical constraints that have become a classic challenge in trade with the Latin American region, he added.
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Editor: Rahmad Nasution
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