Report on MEXPA’s visit to Embassy of Republic of Indonesia

As we all know that Malaysia has no time to lose but compete with emerging markets, we can now look at what Minister of Malaysia Trade and Industry Dato’ Seri Mustapa Mohd had to say. Malaysia has continued a good trajectory with trade expanding by 7.7% in 2011 (RM 724 billion) compared to 2010. Major markets were China, Japan, US, Thailand, India, Hong Kong, South Korea, Taiwan and Netherlands. Exports were electrical, electronic, palm oil, natural gas, crude petroleum, chemical products, machinery parts, metal, optical and scientific equipments.

Giving a business opportunity is MEXPA’s aim to other countries. Today MEXPA takes its executive members on a courtesy call to Embassy at the Republic of Indonesia in Jalan Tun Razak, Kuala Lumpur. Our team comprised of 4 members. We were met and welcome by Economic Counsellor, Bapa Hendra.

The economic adviser and attaché, Bapa Hendra informed us on the history and economy in brief, Bapa also added on global influence, the implementing of KP3E1 and stressed that the time had SME come for Republic Indonesia to look at more upcoming markets. Early kingdoms, gave an overview that the Republic in Indonesia was once home to the Dutch for 310 years, Japanese for 4 years and Portuguese for 84 years.

Republic Indonesia had secured GDP size of more than US $700 billion in 2010, and is the third fastest growing economy in Asia and the largest economy in Southeast Asia. Indonesia’s economy has grown by 6.1% in 2012 and has been forecasted to climb by 6.5% to 9% in 2012. The Indonesia’s economy structure in percentage (refer to 2010 report) stands as:
Services 20% Electrical 1%
Finance 7% Manufacturing 25%
Transportation 7% Mining 11%
Trade 14% Agricultural 15%
Building 10%
Bapa Hendra went on to say that the G-20 member shared 8.5% of the world’s GDP by October 2011, Indonesia consumers had witness the continuation of the country’s world record in confidence level. Republic Indonesia hopes to become the 10th largest economy by 2025 and this quality growth was a smart focus, measurable and manageable.

Indonesia has had its economy growth resulting from intensive dialogues and exchanges of commitments with various business communities. Bapa Hendra went on to explain the plan that the republic had it planned to encourage a large scale investment realization in 22 main economic activities. The Malaysia businessman will definitely be able to invest and participate in any one of the 22 related activities.

In terms of accounting of Natural resources Bapa Hendra stressed that Indonesia will stop the export of raw minerals by 2014 (Law No 4/2009). With Republic Indonesia implementing P3E1 economic corridors and identifies strategic fast trade projects enable business people to concentrate on their needs, Indonesia now eases all admin procedures and makes it more welcoming for the visitors and investors. Some of the economic corridors are:
• Sumatera economic corridor
• Jawa economic corridor
• Kalimantan economic corridor
• Sulawesi economic corridor
• Bali (Nusa Tenggara) economic corridor
• Papua-Maluka Islands economic corridors

This locally integrated program will then globally connect the world. In order to function systematically and prepare the investor, strategic global Hub ports and national system will come into implementation. This logistical preparation will connect roads and superhighways. Big pipe projects IP/ MPLS will take place-metro extension, Telkom superhighways. Once state owned enterprise and private sectors of Indonesia are formed, the end result will boost the equity and economic success, which is good for its citizen and also investors.

On the infrastructure and investment front may changes will take place. With a major change taking place, the future after better outlook and business, trading and investing into Indonesia will open up many opportunities to the Malaysia business too.
Bapa Hendra went on to say the Indonesia government was very serious to reducing unemployment and poverty level of the people. For information purpose, Indonesia now stands internet users being 45 million (2010 status) people. Indonesia is the world’s third largest democracy and has 176 million registered voters. As Indonesia has a rich cultural history, Buddhism, Hinduism and Javanese, Islam is most practiced in Indonesia. One spectacular site is Borobudur temple which is world heritage sites from 8th and 9th centuries, located in central Java. One can look at the tourism industry. To partner and invest in the hotel or service industry would reap in investments as it has a mobile population.

Bapa Hendra says, the Banking industry with Malaysia expertise and skilled labor can venture into opportunities. Some of the big industries from the global countries are Qatar Telecom and Indo set, PT Unilever, TBK, PT Coca Cola and Bottling Indonesia.MEC holdings is venturing in 5 billion infrastructures and integrated development in East Kalimantan and the world. Bank (BKPM) Indonesia Investment coordinating Board acts as the interlocutor between private and government and presents investment opportunities in the business community. BKPM also provides a one stop approach e.g. provisions of licenses and facilities.

Indonesia also provides republic offices in Los Angeles, Sydney, Turkey, Singapore and London. Malaysia can look towards working along in the crude oil, nat gas, thermal coal, palm oil, cocoa, tin and not forget the tourism industry. Education (16% government expenditure) finance and economic (28%) engineering of science (27.5%) it is good to invest as labor cost in low. Exchange student programs are welcomed.

Indonesia has good airports and faces are reasonly priced. It is near to Malaysia and is a good trading partner. Bahasa Indonesia is widely. The Malaysia exporters will now plan to have regular visits and will provide business opportunities to interested members and business people. More Trade missions, Dialogue Talks, Luncheon Talks, receive of visits delegates will be our agenda.

Report prepared by;
Puan Sevaran Kaur JP
State rep. (NS)/ Liaison officer of MEXPA