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Indonesia becomes more economically important for Europe

03-01-2012 13:02 BJT

JAKARTA, March 1 (Xinhua) -- Indonesia is becoming more economically important for European countries as a partner to do business following the financial crisis occurred in Europe.

During the last one month, three European countries sent their business delegations to Indonesia with an aim to cement closer trade and investment ties.

In the same time, the European Union tried to explore potentials to follow up recommendation by the Vision Group of Europe-Indonesia towards the Comprehensive Economic Partnership Agreement (CEPA).

On Jan. 24, Indonesia, Estonia and Finland agreed to enhance economic ties. Indonesia and Estonia stressed the importance of economic bilateral relations in sectors of trade, investment and information and communication technology (ICT). Meanwhile, Indonesia and Finland agreed to increase cooperation on trade, investment and energy

On Feb. 27, Indonesian and Polish businessmen met and tried to explore cooperation in energy and waste management. Poland is also eyeing trade volume of 1 billion U.S. dollar with Indonesia this year from 850 million dollars in 2011. Indeed, with Indonesia's economic growth of 6.5 percent in 2011 and its Investment Grade position stated by international rating agencies, the country is becoming a magnet for European businessmen to work with.

Meanwhile, in the same time, European Union is experiencing financial crisis that force their companies to seek new markets for their products and investment destinations.

With population of 235 million people, Indonesia is certainly is a huge market. The country is also rich of natural resources to attract other countries to invest.

In terms of politic, Indonesia is relatively stable without significant political turbulence.

One thing that would be a bigger magnet for European countries is the Comprehensive Economic Partnership Agreement (CEPA) being discussed. Currently, the Indonesian Business Association (APINDO) and the Indonesian Chamber of Commerce and Industry (KADIN) are starting to socialize the CEPA among businessmen. Socialization will last 3-6 months so that CEPA negotiation could be started early next year.

If CEPA could be adopted soon, more European investors will come to Indonesia as pledged by EU Ambassador to Indonesia Julian Wilson

Aside of common terms in trade agreement, the CEPA also consists of trade facilitation and capacity building.

Europe is the second largest investor in Indonesia, but the country only got 1.6 percent of its total investment in Asia last year while the rest 98.4 percent went else where In 2011, European investment in Indonesia was 2.2 billion dollars, the second largest after Singapore of 5 billion dollars. Meanwhile, trade value of both sides reached 32 billion U.S. dollars with surplus for Indonesia of 8 billion U.S. dollars.

Editor:Zhang Jianfeng |Source: Xinhua

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