The Enhancement of The Economic and Commercial Relations Between Indonesia-Paraguay



Presentation of the Indonesian Ambassador,
Sunten Z. Manurung
for the the Seminar of  “Challenges and Opportunities of Trade and Investments Cooperation Between Indonesia and Paraguay”
Asuncion, July 17th, 2009

Excellency Don Francisco Oscar Rodríguez Campuzano
Vice Ministro de Relaciones Económicas e Integración de la República del Paraguay

Excellency Don Mario Raul Cano Ricciardi, Director General de Comercio Exterior, Ministry of Foreign Affaire of Paraguay

Mr. Erwin Siregar, Director of  Regional Promotion Facility  of the Indonesian Investment Coordinating Board
Distinguished guests,
Ladies and Gentlemen,

First of all, on behalf of the Indonesian Embassy, I would like to extend a warm welcome to all of you to this seminar entitled “Desafios y Oportunidades Comerciales y de Inversion entre Indonesia y el Paraguay”.

I would first of all like to convey my  gratitude to the Ministry of Foreign Affairs of Paraguay in helping us all with the arrangements that have been made for today’s seminar. For your information the idea for this seminar came during my meeting with the Minister of Foreign Affairs of Paraguay, H.E. Don Héctor Ricardo Lacognata Zaragoza on May 19, 2009.  I would also like to extend my gratitude to our guest speaker for travelling from Indonesia in order to attend today’s seminar and also to the moderator, Don Mario Raul Cano Ricciardi, Director General de Comercio Exterior, Ministry of Foreign Affaire of Paraguay. My thanks and gratitude also go to each and everyone of you for your kind presence today.

Excellencies, Ladies and Gentlemen,

May I take this opportunity to introduce our speakers for today, Mr. Erwin Siregar, Director of  Regional Promotion Facility  of the Indonesian Investment Coordinating Board. But before Mr. Siregar offers his thoughts on specific areas of opportunities awaiting to be seized and realised between Indonesia and Paraguay, let me touch on the overall situation in Indonesia  and the excellent status of Indonesia - Paraguay bilateral relations.

Indonesia is a country blessed with  17.508 beautiful islands, located between Asia and Australia and between Pacific and Indian Oceans. Stretches for more than 5000 km, which if we lay above the map of Europe is extended from Moscow to London. In terms of land area, Indonesia is the world’s 16th largest country with 1.919.440 square km. Divided into thousands of islands, Indonesian population is highly diverse in terms of ethnics, culture, languages and customs. This has placed Indonesia as the second most diversed country in the world in term of local ethnic languages, with more than 300 ethnics and 581 languages.

Indonesia is also known as the country with the biggest moslem population in the world, with around 80% of the total 237 millions population profess Islam. At the same time Indonesia also prides itself as the third biggest democracy in the world after India and the United States of America. Indonesia is a living proof that democracy and Islam co-exist in harmony.

Indonesian pride of its democracy is obviously seen during the recent legislative election on April 9, 2009 and presidential election on July 8, 2009.  This is the second time Indonesian people directly elected the President and Vice President after the 2004 Presidential Election. Not only on national level, the democracy is also applied at provincial and district level, where people can choose their own leaders in fair, transparent, democratic election, witnessed by international observers. This political development has also triggered positive outcome in human rights, and socio-cultural development. The latest research by Mercer Institute has placed Indonesia as the country with the highest index freedom in South East Asia. Indonesian President, Mr. Susilo Bambang Yudhoyono is selected as one of the most influenced 100 people in the world of the year 2009 by Time Magazine.

In international politics, since its independence in 1945, Indonesia has actively participate in various regional and international community. Indonesia is one of the founding members of Non-Aligned Movement and ASEAN. In 2007-2008, Indonesia was  non-permanent member of the Security Council. Indonesia is also an active member of FEALAC, WTO, and G-20. Considered as one of the growing economies, Indonesia was invited on G8 Summit plus as one of the Major Economies Forum.

The political stability achieved through a strong democracy in the last ten years has helped Indonesia to develop its economy. During the last few years, Indonesian economy has steadily grown more than 5% every year. In 2007, Indonesia achieved 6,3% growth and with GDP US$ 387,186 billions. In 2008, despite the global crisis, Indonesia still able to perform a positive growth of 6,1% with GDP US$ 485,686 billions.

Indonesian GDP in 2008 shows how diverse Indonesian potencies in economy. While manufacturing industry composes for 27,9% of the GDP, agriculture, livestock, forestry and fishery  come in second with 14,4% and followed by trade, hotel and restaurant with 14%.

The dynamic nature of Indonesian economy is evidently shown in the significant growth in export import activities. Indonesian export in 2008 grows 19,86% from the previous year amounted at US$  136,76 billions and import grows 73,1%  amounted at  US$ 128,79 billions.
In 2009, Indonesia is expected to grow strongly, especially after the general election proved to be carried out successfully. The economy expanded 4,4% in the first quarter 2009. In fact, according to IMF, Indonesian economy, supported by election-related spending, the economy’s resilience was also evident in the stronger than expected growth in Q1 of 2009, making it one of the fastest growing economies in the G-20, while inflation is on a declining trend.

Indonesian economic growth is strongly supported by the local consumption as well as export of Indonesian high quality products. For commodity products, Indonesia has some main products, such as cocoa, coffee, palm oil, rubber and rubber products. As has been shown in Indonesian GDP composition, Indonesia is also quite strong in its manufactured products, such as textile, automotive products, footwear, furniture and electronics.

These potencies that Indonesia has would be beneficials in Indonesian bilateral trade with other countries, including with Paraguay.

Excellencies, Ladies and Gentlemen,

Indonesia and Paraguay established bilateral relations on November 29th, 1982.  I'm very pleased to note that in recent years, the bilateral relations have enjoyed a rapid development. In politics, the friendship between the two countries has getting stronger with visits of high ranking officials. The most notable one was the visit of Indonesian Minister of Foreign Affairs, Mr. Hassan Wirajuda in August 2007. Apart from that Indonesian high officials from Ministry of Foreign Affairs and Ministry of Industry have also visited Paraguay, the most recent one was the visit of Director General of American and European Affairs, H.E. Madam Retno Marsudi on the 3-5 July 2009. From Paraguay, some distinguished members of Paraguay parliaments have also visited Indonesia and met their counterparts to discuss various issues regarding the bilateral cooperation. We expect that in the near future, high ranking officials from Paraguay will visit Indonesia. Several agreements and Memorandum of Understanding have been signed, marked the strong cooperation between Indonesia and Paraguay.

In socio-cultural cooperation, every year Indonesian government offers scholarship for students all over the world, including from Paraguay to study Indonesian culture and language for a year in Indonesia. One of the recipients was Sergio Morales from Paraguay in 2007. In sport, since August 2008, Indonesian province of Nanggroe Aceh Darussalam sent their junior soccer team to be trained in Paraguay. There are also many Paraguay soccer players who currently play in Indonesian league.

In economy, both countries and peoples have drawn real benefits from our growing economic and trade cooperation. Commercial cooperation between Indonesia and Paraguay has increased from time to time. In 2007, Indonesia participated on the 26th Expoferia Internacional de Ganaderia, Industria, Comercio y Servicio that sucessfully increased volume of trade between Indonesia and Paraguay to 55.77% compared to the previous year. At that time, Indonesian export to Paraguay reached 4,55 millions US dollar, which is the highest Indonesian export to Paraguay since 2004. In 2008 Indonesian export was around 5 millions US dollars.

Paraguay export to Indonesia continues to grow. In 2007 Indonesian import from Paraguay were 310 thousands US dollars and around 1 millions US dollars in 2008.  We hope that Paraguay export to Indonesia keeps increasing in the coming future.
There are still many potencies and economic opportunities to be explored in both countries. Indonesia has strong manufacture industries, such as electronic, automotive component, medical instruments, and chemical products, as well as agricultural products, among others are coffee, cocoa, palm oil, and spices. On the other hand, Paraguay also has several products needed by Indonesia, including dairy products, soybean, and meat.

Indonesia needs 13,41 kg per capita soybean a year and Indonesian local soybean  can only provide 20% of the total demand. 60% or 1,3 million tons of the total soybean imported by Indonesia comes from USA. Paraguay as the fourth biggest producer of soybean can be another source of Indonesian soybean import.

Last year, Indonesian veterinary and officials from the Ministry of Agriculture and Livestock came to Paraguay to seek the possibility of opening the import from Paraguay. We hope that this possibility could be materialized in the near future and Indonesian can import good quality meat from Paraguay.

In November 2007 Indonesia has opened Indonesian Business and Cultural Center in Asuncion, Paraguay, to promote a better and more fruitful relation especially in economy, trade and investment between Indonesia and Paraguay. Indonesian second participation in Expo Rural in Paraguay this year is a medium for Indonesia and Paraguay to know each other potencies better. Indonesia pavilion in this year expo is not only consisting of Indonesian entrepreneurs but also officials from Indonesian Ministry of Industry and Indonesian Investment Coordinating Board.

We believe their presence will give more profound information on how to maximize the opportunities posses by the two countries.

We fully realize that being knowledgeable about each other potencies is not enough without working on these potencies into something mutually beneficial for our two countries. For this reason, we need to work together both public and private sectors to smoothen the way to increase the business activities of both sides. Various strategies of promotion campaign should also be done from market networking, websites, business meetings, seminars and participations in international trade fairs.

Last but not least, I hope the information we share today would be useful for our future economic relations. I would be very happy if one day I see some of Paraguay businesspeople here to come to Indonesia and working on trade activities with their Indonesian counterparts.   If any of you need further information, after the seminar, please don’t hesitate to contact Indonesian Honorary Consul in Paraguay, Mr. Ricardo Sanchez Abdo or directly contact us the Indonesian Embassy in Buenos Aires.

Thank you very much.