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RI, Czech Republic foster closer economic ties

10th July 2012 | 3.859 Views
RI, Czech Republic foster closer economic ties
President Susilo Bambang Yudhoyono (right) and Presiden Vaclav Klaus (left). (ANTARA/Widodo S. Jusuf)
Jakarta (ANTARA News) - Indonesia and the Czech Republic have agreed to foster a closer economic cooperation in an effort to increase the volumes of their bilateral trade and investment which was so far considered small.

The agreement was reached during President Vaclav Klaus` three-day ongoing visit to Indonesia, which was the first visit by a Czech head of state, since both nations established relations in 1993, following the fall of Communism at the start of the decade.

"His visit is vitally important because we agreed to increase our partnership. I am pleased to tell you that relations between Indonesia and Czech Republic are running well and continue to grow every day," President Susilo Bambang Yudhoyono said at a press conference following a bilateral meeting with President Vaclav Klaus at the State Palace on Monday evening.

Yudhoyono said Czech is an important country in Central and Eastern Europe, while Indonesia is the biggest country in Southeast Asia. Although their bilateral trade is still relatively small, trade ties increased significantly in 2010-2011.

According to the Czech Republic`s Environment Minister Tomas Chalupa, the total value of bilateral trade between the two nations reached US$500 million in 2011, which is double that of 2005 as quoted by the Jakarta Post on Tuesday.

Indonesia and Czech Republic on Monday agreed to develop three areas of cooperation which they believe would enhance mutually beneficial economic and investment relations.

The three areas of cooperation were trade, investment and tourism, energy and green economy, and defense industry.

Yudhoyono said he was optimistic that relations between the two nations would continue to grow and asked all sectors to get involved in building connectivity between the two countries through government-to-government, business-to-business, and people-to-people relations.

"I am pleased to hear that he has visited Borobodur and Prambanan temples and held a business meeting. He is visiting Indonesia, along with a business delegation to interact with Indonesian business people," he said.

Meanwhile, President Vaclav Klaus said his meeting with his Indonesian counterpart had sent a clear message to the public that the two countries were prepared to develop strategic and mutually beneficial relations. "We have talked about energy cooperation and environment-oriented development. The talks on energy are very important," he said.

In order to strengthen bilateral cooperation in trade, the Indonesian Chamber of Commerce and Industry (KADIN) and a Czech business group signed a memorandum of understanding (MOU) to promote business opportunities.

"We have agreed to promote our business opportunities. We`ll promote Indonesian businesses with the Czechs, as well as they promote theirs," said KADIN Chairman Danny Jozal here on Monday.

Danny said several businessmen representing 12 Czech companies attended a Czech-Indonesia Trade and Investment Forum which provided an opportunity for KADIN to promote Indonesian business interests.

He hoped that they could develop disclosure of information and promote business cooperation between the two countries. Danny noted that Indonesian exports to Czech were bigger than its imports. Therefore, he added, that an opportunity to export to the Czechs was conducive ever since the latter had seceded from its communist regime.

Data at the Indonesian Trade Ministry showed that the trade balance with the Czech Republic slid during the first quarter of this year, where Indonesia booked a deficit trade balance of US$5.83 million, up 1,937 percent, compared to US$286,000 in the first quarter of last year.

Regarding investment, Amad Kurniadi, deputy chairman for investment cooperation at the Investment Coordinating Board (BKPM) said that Czech investment in Indonesia was still very small, amounting to only about US$36.6 million in four projects spanning hospitality, metal, machinery and electronics sectors.

"But this state visit will heighten the momentum of our relationship as both governments have agreed to expand economic relations," Achmad was quoted by the Jakarta Post as saying.

Achmad quoted the United Nations Conference on Trade and Development (UNCTAD) Investment Report 2011, which showed that direct Czech investment in Indonesia was $33.3 million in 2010.

Therefore, Indonesia will encourage Czech investors to build textile, defense equipment, radar and pharmaceutical factories in the country, according to Industry Minister MS Hidayat.

"So far, there are no Czech investors involved in developing factories in Indonesia. To improve both countries` economies, the Ministry of Industry will ask them to start building factories here," said Hidayat on Monday.

He added that some investors from the Czech Republic were interested in building factories in Indonesia in cooperation with Indonesian businessmen.

"The Czech businessmen want to invest particularly across machinery, military and pharmaceutical industries. Indonesia needs such investment and the Czech businessmen have expressed their willingness to invest in Indonesia, as well as export their commodities to Indonesia," Hidayat explained.

In this case, KADIN expects the Czech Republic to be more competitive with other countries in order to improve trade cooperation with Indonesia.

"We expect they [Czech businessmen] can price their products competitively. If they can`t, what`s the difference between Czech Republic and China?" he said at the Czech-Indonesia Investment and Trade Forum.

Danny stated that the quality of Czech products was good, but questioned whether it was better than that of Chinese products. Therefore, he said, Czech businessmen must offer competitive prices for their products.

Danny noted that the value of Indonesian exports to the Czech Republic was more than that of its imports from the European country.

"We have exported oil palm, crude palm oil and raw rubber. If they want to have cooperation with us, they should invest more here," he said.