Indonesia - RI companies told to seize the advantage of ASEAN market

The government was calling on Indonesian companies to take advantage of the ASEAN market; not to consider it a competitor, a senior trade official said Friday.

“The biggest challenge for Indonesia is to determine how to seize the advantage in ASEAN in order to further develop the service sector, both at home and also toward other ASEAN member states,” the Trade Ministry’s international trade cooperation director general, Imam Pambagyo, told reporters on the sidelines of a Senior Economic Officials’ meeting at the Sofitel Hotel in Phnom Penh.

“This is a unique challenge that we can exploit.”

Iman emphasized the fact that Indonesia had huge potential in the service sector with a considerable number of Indonesian workers and professionals working in countries such as Cambodia, Laos, Malaysia, Singapore and Vietnam.

“These are not unskilled workers, but professionals, such as hotel managers and chefs,” he said.

“Usually, those people already employed in ASEAN countries recruit their former colleagues from Indonesia.”

He added that Indonesia was moving toward becoming a service-oriented country with less dependence on commodities and manufacturing.

Iman admitted, however, that the perception persisted that Indonesian companies were only good at competing at home and not at the regional level.

“That is why we are trying to change the mind-set, so that we no longer differentiate between the Indonesian market or the ASEAN market. The market has become one,” he said.

“We are trying to raise awareness about the recently issued presidential decree on the ASEAN national secretariat. Insya Allah [God willing], the secretariat will be operational in 2013.”

Presidential Decree No. 23 on the ASEAN national secretariat was issued on Aug. 13.

Iman said it was important to raise awareness about ASEAN for Indonesia’s own benefit rather than to merely fulfill ASEAN commitments.

He pointed out the fact that three state-owned companies, Bank BNI, oil and gas producer PT Pertamina and construction company Wijaya Karya, had opened branches in Myanmar to seek out opportunities in the country.

When reminded that other ASEAN member countries, especially Singapore, had made a bigger mark in the newly democratized Myanmar, Iman simply said it was better late than never.

“We only gained sufficient awareness recently,” he said, adding that such awareness was needed ahead of the ASEAN Community 2015, which will have a mjor impact on the economic pillar.

Efforts to create the ASEAN Community 2015 began in 2010 with the introduction of the Common Effective Preferential Tariff, since when most duties have been lowered to virtually zero percent, he continued.

“We will further harmonize customs regulations to become seamless among ASEAN countries,” he said.

“While we have no plan to move in the direction of a customs union such as is taking place in Europe, we are still studying the European model,” he added.

While admitting that there was still much to be done to dovetail regulations at the ASEAN level with those at the national level, Iman said that other countries were looking to the ASEAN model for inspiration.

“Several economies in APEC, for example, have expressed the idea that the ASEAN model is more flexible,” he said.

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