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The Warsaw Voice » Other » April 23, 2008
Indonesia in Poland
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Boosting Bilateral Trade
April 23, 2008 By W.¯.    
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Indonesia is stepping up efforts to intensify trade with Poland and to promote itself as a destination for Polish tourists. The latest such effort is the upcoming Indonesia Expo CEE commercial exhibition in Warsaw, one of the largest events of its kind in Central Europe to date.

Indonesia, which spreads across a chain of islands between Asia and Australia, has become one of the fastest growing economies in its region. According to the Indonesian statistical office BPS, the country's GDP grew 6.32 percent in 2007, compared with 5.5 percent a year earlier. Rapid economic growth has led to more international trade and foreign investment in Indonesia, and, for the first time in many years, it may also lead to Indonesian investment in Central and Eastern European countries, including Poland. According to Indonesian economists and specialists, the best inroad into Central and Eastern Europe for Indonesian businesses is via Poland.

The most important event in recent years in Polish-Indonesian relations was the June 2006 visit to Jakarta by Rados³aw Sikorski, at the time Polish defense minister and now minister for foreign affairs. While in Jakarta, Sikorski signed a bilateral defense agreement with his Indonesian counterpart and said that Indonesia was a market of opportunity for the Polish defense industry. Supported by the Polish government, Polish companies signed contracts with an estimated value of over $100 million to supply Indonesia with defense equipment. Polish patrol boats, helicopters and airplanes capable of taking off and landing on short runways met Indonesia's security requirements. Polish export hits in Indonesia include Skytruck planes and helicopters. Polish companies also provided Indonesia with advanced technology such as complex radar systems. Moreover, the Poles are gradually transferring their technical know-how so that the Indonesians can start to produce spare parts for themselves.

Sikorski's visit was important not only with regard to Indonesia's defense requirements but also because the accompanying executives from defense company Bumar, the Polish Agency for Industrial Development, shipyards and aviation businesses, entered into initial negotiations to export other goods to Indonesia besides military hardware.

To coincide with Sikorski's visit, the Trade Promotion and Investment Department of the Polish embassy in Jakarta organized a special conference entitled "Polish Defense and Logistics Equipment-Perspective for Cooperation with Indonesian Industry."

Earlier, in July 2005, during a visit by the then Polish Prime Minister Marek Belka, the embassy had organized a conference on Polish defense, logistics and anti-terrorist equipment that was also designed to promote Polish military equipment. During Belka's visit, the Poles exhibited Polish crafts including amber jewelry, decorative glass and crystal.

Trade between Poland and Indonesia was already worth a record $397.9 million in 2004, or 39.6 percent more than the year before, according to Poland's Central Statistical Office (GUS). Imports to Poland from Indonesia were worth $338.4 million, an increase of 26.9 percent over 2003, and Polish exports to Indonesia totaled $59.5 million, a rise of 223.4 percent from a year earlier.

Poland imports Indonesian products such as natural rubber, textiles, yarn, clothing, shoes, coffee, tea, palm oil, confectionery products, chemicals, data processing technology and wood products. Poland exports wheat, milk powder, electrical equipment, perfumes and cosmetics, metal products, boilers, plumbing fittings and medical instruments to Indonesia.

Poland's mining sector is pinning high hopes on trade with Indonesia. On June 15 last year, Polish mining company Kopex signed a letter of intent with Indonesia's PT Wahana Baratama Miningirma company under which Kopex will act as a general contractor during the construction of a deep mine in Indonesia. The estimated value of the three-to-four-year project is a whopping $1 billion. Kopex will design and build the mine, equip it with modern machines, and supervise extraction.

Another large Polish mining business mission visited Indonesia last fall. The delegation included executives from not only Kopex but also other mining sector companies such as Famur and Dressta. They organized a conference entitled "The Potential of Polish Mining Machinery, Equipment and Technology" and took part in the Mining Indonesia 2007 exhibition. At the exhibition they met with Indonesian officials including the deputy minister for energy and natural resources responsible for the mining sector; the deputy minister for national development; the deputy chairman of the Investment Coordination Council; and local businesspeople.

In the tourism sector, all interested parties-including travel agencies, hotels and tourists-agree that the biggest barrier preventing the development of Indonesia as a tourist destination is the high cost of getting there. Flights to Indonesia from Central Europe with KLM, British Airways or Lufthansa are not only costly but require at least two stopovers, in a Western European country and in Singapore or another Asian city. This may change in the near future as domestic carrier Garuda Indonesia plans to reinstate direct Central European routes. This may happen in 2010 if the airline decides the project is commercially viable, said Sapta Nirwandar, Director General of Marketing in the Indonesian Ministry of Culture and Tourism. Garuda Indonesia has recently purchased a large number of new aircraft suitable for long-distance flights. Some of these planes-sporting the characteristic Garuda eagle logo-may soon appear at airports in Warsaw, Prague and Budapest.

Meanwhile, the recent International Tourism Fair in the southern Polish city of Katowice-one of the biggest tourism fairs in Poland that attracted a total of 17 countries this year-featured Indonesian exhibitors for the first time.
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