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Indonesia: a honey pot for Pakistani exports

August 28, 2012


Cotton, copper waste and scrap, cotton fabrics, broken rice and fresh fruits especially kinnow were the major items imported from Pakistan. - File photo

JAKARTA: Pakistan's trade with the largest ASEAN economy of Indonesia booked 45 per cent increase in 2011, whereas exports from Pakistan surged by 107.8 per cent amounting to US$206.2 million.

The most important aspect is the continued growth trend for exports from Pakistan keeping in view the swelling of middle class among the 240 million Indonesians.

It was disclosed to the media by Iqbal Tahir, Business Attache at the Embassy of Pakistan, Jakarta.

Iqbal Tahir confirmed that the bilateral trade reached the record high target of $1.2 billion in 2011 which in itself is pathetically low given the existing trade potential between the two countries.

It should have been at least $5 billion.

The contributory factors could have been our enhanced participation in Indonesian's textile manufacturing.

Pakistani exporters only need to be more vigilant about quality and honest trading practices.

He made a mention of the new goods that the Mission was able to project as the most competitive Pakistani products for Indonesia.

These included maize, wheat, wheat flour, unmanufactured tobacco, fresh fruits, fruits and nuts, ready-made garments, finished and semi finished leather, fish and fish products, cotton fabrics, cotton Islamic wear, prayer rugs, IRRI-6 rice, broken rice, hide and skins, surgical goods, handicrafts, sports goods and sportswear.

Tahir further said that according to Indonesian official statistics, major imports in 2011 included cotton worth $41.7 million, maize $28 million, copper waste and scrap $14.8 million, wheat $9.3 million, fabrics $7.4 million, flours $6.7 million, oranges $6.2 million, broken rice $6 million, yarn $5.4 million, hides and skins $4.9 million and tanned leather $4.6 million.

In the first half of this year bilateral trade reached $880 million with imports from Pakistan amounting to$ 126.7 million. Cotton, copper waste and scrap, cotton fabrics, broken rice and fresh fruits especially kinnow were the major items imported from Pakistan.

The likelihood is that by December the exports would be around $ 300 million. Seen against the historical trend and Pakistan's exports to other ASEAN countries, this will be a sizeable growth.

Iqbal Tahir added that Preferential Trade Agreement (PTA) which was signed by the Indonesian Trade Minister Gita Wirjawan and Ambassador Sanaullah on behalf of their respective governments earlier this year is likely to add 15-20per cent boost to Pakistani exports due to negotiated concessions.

Under the PTA, Pakistan side has been offered zero rated tariffs on fresh fruits (kinnow, lemon, grapes, apple, pears, apricots, dates, wafers and biscuits, fruit juices). Pakistan can also export, on reduced tariff rates, fan (ceiling, wall, table etc), cotton yarn, fabric, knitted garments for men, sea food, badminton/tennis rackets; and leather goods. The PTA is likely to become applicable after ratification in next two months.

Continuing Mr Tahir observed that a number of Indonesian firms are interested in investing in Pakistan in various sectors such as wheat flour, fishery products and restaurants.

A number of specific projects are underway.

He highlighted the Mission's regular contact with Pakistani traders residing in Jakarta, Bali, Medan and Surabaya urging them to set up a Business Council in collaboration with Indonesian businessmen who are likely to participate in Expo Pakistan 2012 being held at Karachi in October.

Moreover, the Mission has firmed up arrangements for seven Pakistani surgical and medical instruments manufacturers who would be participating in the Hospital Expo being held at Jakarta in early November.

The Mission is also in contact with the local Foreign Office as well as Indonesian Chambers of Commerce in a bid to obtain commitments for participation in the D-8 Exhibition and Seminar being organized by TDAP later this year.

The Indonesian Ministry of Agriculture has also been approached to amend three regulations on horticultural imports which reduced entry points from eight to four as well as announced strict quarantine procedures.

As the Indonesian move was against the true spirit of PTA, the Ambassador forcefully raised his concerns with the Trade Minister as well as senior governmental officials and proposed conclusion of Mutual Recognition Agreement between the two countries at an early date.

Iqbal Tahir stated that the Ambassador has held several meetings with host government's senior officials and CEOs of major business concerns which among others included Mr. Suryo B. Solisto, Chairman Indonesian Chambers of Commerce and Industry (KADIN), Mr. Elias Ilhamy, Chairman Indonesia-Pakistan, Bangladesh and Nepal Committee at the KADIN, Mr. Bintarna Tardy, Chairman Seafood on Time Group, Ms. Sharmila, Chairman of Indonesian Women Entrepreneurs.

As a result more than twenty Indonesian business people have committed to participate in the Expo Pakistan 2012.