Posted on 30 Apr 2015
Indonesia and Taiwan officiated on
Wednesday a business council that will help tighten links between
businesspeople from the two nations, an effort that may ease the flow of
investment from the East Asian economy into Southeast Asia’s top economy.
The director of the economic division at the Taipei Economic and Trade Office
(TETO) in Indonesia, YC Tsai, said that the council would facilitate investment
from Taiwanese firms into Indonesia by providing necessary information on doing
business in the country as well as setting up contacts with local
businesspeople as potential partners.
“Taiwan businessmen need more chances to have contact with local businessmen.
They also need to build partnerships with Indonesian business groups like
Apindo [the Indonesian Employers’ Association] and Kadin [the Indonesian
Chamber of Commerce and Industry],” he said.
The council will be chaired by Setyono Djuandi Darmono, the president director
of PT Jababeka, and will have four deputy chairmen representing Indonesian and
Taiwan businesses.
The establishment of the council in Indonesia follows a similar step taken in
Taiwan with the recent foundation of the Taiwan-Indonesia Business Council,
which is based in Taipei.
Tsai further said that as Taiwanese firms were eager to expand aggressively in
Indonesia and gain sufficient knowledge on the market, government policies
affecting business and appropriate business partners were key to doing that,
will all functions to be met by both councils.
Within the five-year period ending last year, Taiwan had been the 12th biggest
foreign investors in Indonesia, spending US$1.45 billion, according to data
from Indonesia’s Investment Coordinating Board (BKPM).
Some of the benchmark projects included manufacturing facilities built by
e-United Steel, Maxxis Tires and Kenda Tires.
Kristy Hsu, the program director for the Taiwan ASEAN Studies Center at the
Chung-Hua Institution for Economic Research, said that Taiwanese firms were now
either considering or adopting the so-called “ASEAN strategy”, which puts a
focus on expansion in Southeast Asia as the investment climate in China is less
favorable than it was in the past.
Indonesia is one of the most favorable destinations for Taiwanese firms. It is
competing with the Philippines and Vietnam. However, a number of obstacles
ranging from poor infrastructure to a weak manufacturing industry structure
must be addressed to win, according to Hsu.
Hsu suggested that one of the solutions to create more a conducive business
climate was to seal an economic cooperation agreement (ECA), which would
significantly lower import duties and give preferential treatment for foreign
direct investment.
