RI, Russia to establish economic forum

The Jakarta Post, Jakarta | Wed, 09/22/2010 9:44 AM

The governments of Indonesia and Russia will soon sign an agreement to set up a bilateral economic forum to address issues on economic and trade cooperation between the two countries, an official says.

Trade Minister Mari Elka Pangestu said Tuesday the forum would function as a place for Jakarta and Moscow to discuss and exchange potentials and constraints in boosting trade and investment.

“Businessmen from Indonesia barely recognize the huge economic potential of Russia and vice versa,” she said at her Jakarta office.

Mari said that among the constraints that currently hindered the growth of Indonesia’s exports to Russia was limited access to export finance from either Russian or Indonesian export facilities. The absence of direct transportation to send goods from Indonesia to Russia, had become a major concern, she added.

According to Trade Ministry data, the value of Indonesia’s exports to Russia in the first half of this year reached US$242 million, while the value of imports was $540.3 million, bringing the deficit to $298 million.

In 2009, total bilateral Indonesia-Russia trade volume hit $774 million with exports reaching $316 million while the deficit was $142 million.

Mari said the Indonesia-Russia economic forum was very important in facilitating direct talks on Russian import duty regulations. Russia was not a member of the World Trade Organization (WTO), so many regulations were different from those in WTO member-states, she added.

She said that Russia was a potential market for various Indonesian products, including palm oil, cacao and tea. She added that Russia not only was a large market, but it also had strong purchasing power.

“We are now still discussing which sectors should be prioritized in this cooperation. We will also listen to opinions from businessmen in both countries. The fact is, Russia is very upbeat with this cooperation,” she explained.

Robust economic performance in recent years has made Indonesia an appealing partner for economic cooperation. Indonesia’s competitiveness index rating has climbed 10 places to 44 out of 139 countries in the Global Competitiveness Index (CGI) 2010-2011. (rdf)