Indonesia and Canada: boosting relations

| January 4, 2013 | 0 Comments
Indonesia’s capital, Jakarta, at dusk.

Indonesia’s capital, Jakarta, at dusk.

By Dienne H. Moehario
Ambassador of Indonesia

In its relations with Canada, Indonesia’s priority is enhancing bilateral relations between our two countries. The year 2012 was an important one because Indonesia and Canada celebrated the 60th Anniversary of diplomatic relations, in October 2012. The spirit of the celebration was maintained throughout the year.

Highlighting the anniversary was the joint declaration by Canada and Indonesia, which promises to enhance bilateral consultations. It was signed in Ottawa in August by Indonesian Foreign Minister Marty M. Natalegawa and his Canadian counterpart, John Baird. In addition, there was the signing of the joint declaration between the Indonesia-Canada Parliamentary Friendship Group and the Canada-Indonesia Parliamentary Friendship Group in Quebec City on Oct. 24, and the visit of the 59-year-old Indonesian tall ship, Dewaruci, in St. John’s, Nfld. in July. The vessel drew close to 700 locals who came to tour it.

Indonesia and Canada continue to strengthen their educational co-operation. Several memorandums of understanding were signed in 2012, namely a memorandum of understanding on health sciences and English teacher training between the Ministry of Health of the Republic of Indonesia and CEGEP John Abbott College; a memorandum of understanding on higher education and arts co-operation, between the Indonesia Institute of the Arts, Yogyakarta and CEGEP John Abbott College, in Sainte-Anne-de-Bellevue; and a memorandum of understanding on education, tourism and event management, between Sekolah Tinggi Pariwisata Bandung and CEGEP John Abbott College.

Bilateral trade remains central to the relationship. The trade figures between Indonesia and Canada have shown a positive trend in recent years. In the last three years, Indonesia’s exports to Canada totaled $1 billion (2009), $1.26 billion (2010) and $1.43 billion (2011) — all in Canadian dollars. Likewise, Indonesia’s imports from Canada were $970 million (2009), $1.06 billion (2010) and $1.64 billion (2011). The main goods imported by Indonesia from Canada are fertilizers, wheat, wood pulp, chemical products and aircraft. Indonesia’s main exports to Canada are natural rubber, textile-related products, furniture, electronic parts and coffee.

Some Canadian companies are doing well in Indonesia, but I expect to see more as trade between Indonesia and Canada has abundant potential to be further developed. Indonesia sees Canada as an important market for various Indonesian products, such as rubber-based products, garments, agricultural products, computers and accessories, furniture, medical instruments, electronics and jewelry, which I believe can meet or even exceed the requirements of Canadian users. Likewise, Indonesia is a huge market for Canadian goods and services. With a population of more than 250 million people and an increasing middle class, Indonesia is a market on which to focus. The current GDP per capita stands at approximately $3,500 and the Indonesian government expects it will increase to between $14,250 and $15,500 in 2025. Meanwhile, the current GDP is approximately $855 billion and is expected to reach between $4 trillion and $4.5 trillion by 2025.

Indonesia is a resource-rich country like Canada. Indonesia has an abundance of renewable (agricultural products) and un-renewable (mining and minerals) natural resources. Since 2010, Indonesia has been one of the world’s major producers of a broad range of commodities. It is the largest producer and exporter of palm oil in the world. It is the world’s second-largest producer of cocoa and tin. For nickel and bauxite, it ranks 4th and 7th respectively in the world’s reserves. It is also one of the largest producers of steel, copper, rubber and fishery products.

Indonesia is a sprawling archipelago and the government puts great importance on developing the nation. The Indonesian government introduced a “masterplan for the acceleration and expansion of economic development 2011-2015,” known in the Indonesian acronym as MP3EI. It provides the building blocks to transform Indonesia into one of the 10 major economies in the world by 2025. To achieve this, economic growth must reach between 7 and 9 percent per year on an ongoing basis.
The implementation of MP3EI includes eight programs, that consist of 22 main economic activities, including ICT, shipping, animal husbandry, mining, fishery, food and agriculture, tourism and transportation equipment. These economic activities provide investment opportunities for Canadian companies. It is my wish that Canadian companies will be one of major sources of foreign investment in Indonesia. It is important to note that Indonesia’s Investment Law No. 25 of 2007 guarantees equal treatment to foreign and domestic investors; and investors shall be granted the rights to transfer and repatriate in foreign currencies. To conclude, Indonesia and Canada are ready to take further steps in deepening and widening economic, trade and investment ties, and promoting educational and cultural exchanges as well as people-to-people interaction.
Dienne H. Moehario is ambassador of Indonesia in Canada. Reach her at dubes@indonesia-ottawa.org or 613-724-1100.

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