Oct 14, 2012

Indonesia - Peru cozying up to ‘attractive’ Indonesia

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At the inauguration in Jakarta in July of the third ASEAN-Latin American and Caribbean Business Forum, President Susilo Bambang Yudhoyono urged the gathered businesspeople from Latin America to “Seize the day!”

It seems that Peru, the fastest-growing economy in South America, has been responding positively to Yudhoyono’s call by making an all-out effort to reach Southeast Asia’s largest economy.

Peru’s Foreign Trade and Tourism Minister Jose Luis Silva Martinot recently visited Indonesia to foster bilateral relations and attend the business forum. “With 240 million people and plenty of natural resources, Indonesia offers many opportunities,” Silva told The Jakarta Post recently.

Silva said that Peru was in a perfect position to become a good partner from Latin America, which has a collective gross domestic product (GDP) of US$6.87 trillion. Peru’s economy posted a remarkable 8.8 percent growth in 2010 and 6.9 percent in 2011. Growth is expected to reach at least 6 percent again this year, on a par with Indonesia. “Peru is the fastest-growing economy [in Latin America]. Last year, our exports grew by 28 percent,” Silva said.

With Peru in the top rank of global fish meal producers and being a country rich in copper, silver, lead, zinc, oil and gold, Silva is proposing that Indonesian businesspeople invest in fisheries and mining.

“Prospects are good. However, Indonesia can also invest in rubber plantations. In fact, rubber originated from Peru, but now Indonesia is the largest rubber producer [in the world],” Silva said.

Silva said that Peruvian investors were seeking opportunities here, mentioning that soft drink company, Big Cola, had entered the Indonesian market. “It is doing very well. More investors may follow in the future,” Silva said.

Echoing a similar view, an Indonesian official said that Peru was one of Indonesia’s targets among non-traditional export markets.

“Peru and Indonesia complement each other in the trade sector,” said Gusmardi Bustami, the Trade Ministry’s director general of national export development.

Based on data from the Central Statistics Agency (BPS), trade between Peru and Indonesia tripled over five years, reaching $213.37 million in 2011. Despite the global economic crisis, bilateral trade between the two states surged to $156.77 million in the first seven months of this year, a 35.72 percent increase from the $115.51 million reached during the same period last year.

The trade balance heavily favors Indonesia, which primarily exports rubber, wood products, sports shoes, paper, garments, motorcycle spare parts, aluminum, glass, ceramics, plastic and electronics to Peru. Indonesia imports fish meal, animal feed, medicines, grapes, wheat and fertilizers from Peru.

Silva expressed his hope that relations would grow even closer. Peruvian President Ollanta Humala held bilateral talks with President Susilo Bambang Yudhoyono on the sidelines of the APEC Summit in Vlodivostok, Russia last month. Humala also plans to visit Indonesia in the near future.

Veeramalla Anjaiah

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