Deiss calls for trade accord with Indonesia

Joseph Deiss (left) at his meeting with Indonesian President Susilo Bambang Yudhoyono Keystone

Economics Minister Joseph Deiss, ending a trade visit to southeast Asia, has invited Indonesia to enter an agreement with the European Free Trade Association (Efta).

Deiss, accompanied by a delegation from the Swiss business community, also called on the Jakarta government to make conditions easier for investors.

During talks on Sunday and Monday, Deiss urged Indonesia’s president, Susilo Bambang Yudhoyono, the minister of trade, Mari Elka Pangestu, and the economics minister, Aburizal Bakrie, to conclude the free-trade accord with Efta.

Switzerland, Iceland, Liechtenstein and Norway are members of the Geneva-based organisation.

“It is a basic element to promote trade between Indonesia and Switzerland,” said Deiss. Indonesian authorities promised they would study the request.

Efta officials are to visit Indonesia over the next few weeks to explore the possibilities, Deiss added.

Weak trade

Trade relations between Indonesia and Switzerland are weak compared with other countries and this should be remedied, the economics minister argued.

While there are 250 Swiss companies in Singapore, which Deiss also visited, there are only 75 in Indonesia.

The Swiss business delegation said that there was potential, but that Indonesia had to make efforts to combat corruption and counterfeiting, as well as ease red tape and taxes.

Deiss said that discussions with the different government ministers had revealed an Indonesia that was prepared to make efforts.

He added that the president, elected in August, had expressed a willingness to promote more democracy and that ministers had been attentive to the Swiss delegation’s complaints.

Considerable changes

Deiss said that there had been considerable changes in Indonesia since the arrival of the new government.

“My message was that if Indonesians eased conditions, investors would follow,” Deiss explained.

Apart from meetings with the authorities, Deiss also used his trip to Jakarta to sign a declaration of intent at Bank Indonesia concerning a project sponsored by Swisscontact, the development organisation of the Swiss business sector.

The organisation is cooperating with the International Finance Corporation over a programme to give financing to small- and medium-sized enterprises (SMEs).

Co-financed by the Swiss State Secretariat for Economic Affairs, which has contributed SFr5 million ($4.18 million), the project helps SMEs gain access to bank credit.

Switzerland is also participating in an additional fund of SFr500,000 to encourage banks to give credits to businesses in the regions hit by last December’s tsunami.

During his three-day visit to Indonesia, Deiss also visited the city of Banda Aceh, at the northern end of the island of Sumatra, which was devastated by the tidal wave.

Attracting investors

Deiss began his trip in Singapore, where he spent two days aimed at improving bilateral relations with the island state and attracting investors to Switzerland.

He commented that relations with Singapore were particularly good and competition could only be beneficial.

Deiss also inaugurated a Swiss business hub in Singapore to help boost the presence of Swiss SMEs in the ten countries of ASEAN – the Association of South East Asian Nations.

swissinfo with agencies

Key facts

Swiss direct investments to Indonesia, with a population of 215 million, total SFr781 million (0.2 per cent of total investments).
In comparison, Swiss investments amount to SFr8.64 billion in Singapore (2 per cent of total investments).

In brief

Swisscontact is the aid organisation of the private business sector. It spent SFr37 million ($30.87 million) in 2004. The government financed 80 per cent of this, with the rest coming from business, and international and local partners.

Supported by the State Secretariat for Economic Affairs, Swisscontact has organised a project in Indonesia to advise and give financial aid to SMEs.

Switzerland has allocated SFr29.5 million for emergency aid and initial reconstruction efforts in Indonesia, Thailand and Sri Lanka.