Speaking at a seminar on "Indonesian Economic Diplomacy in Central Asia" here on Wednesday, Director of South and Central Asia of the ministry Listyowati stated that the establishment of the two factories was part of efforts to increase Indonesias volume of trade in Kazakhstan, given its strong economy.
So far, Indonesia has only exported car tires to Kazakhstan instead of building a factory there due to certain obstacles. These include the high costs of logistics and transportation.
"A memorandum of understanding has been signed by private sector companies of both countries. However, it will take time to realize the construction of the two factories," she pointed out.
Listyowati added that Indonesia needs to follow the ways of Singapore and Malaysia. The two neighboring countries have introduced direct flights and cargo plane services to some Central Asian countries.
Moreover, she believes that the instant noodles market in Kazakhstan has potential to be tapped into because the country produces abundant wheat, which can be used as the main ingredient of the product in the factory.
Indonesia can also export other commodities, such as medicines, textiles, herbs, furniture, and spare parts, to Kazakhstan.
In addition, these efforts are part of plans to boost the export of Indonesian commodities to non-traditional markets in Central Asia, such as Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.
Furthermore, Indonesia witnessed a downward trend in bilateral trade with four countries in the 2010 to 2014 period. Trade with Kazakhstan dropped by some 3.42 percent; with Kyrgyzstan by 23.17 percent; with Tajikistan by 43.65 percent; and with Turkmenistan by 43.65 percent.
Indonesia posted an upward trend with only two countries---an increase of about 21.84 percent with Azerbaijan, and 16.26 percent with Uzbekistan.
Some large countries, such as the United States, Russia and China, have begun to expand their investments in Central Asian countries.
So Indonesia is expected to increase its trade volume as well by using Kazakhstan as a hub due to its strategic position, which can help connect the country with some big markets such as China and Russia. (*)