ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Norway boosts trade, investment ties with Indonesia
Publication Date : 14-01-2013
Norwegian Crown Prince Haakon recently paid a five-day official visit to Indonesia along with a delegation comprising high-level officials and around 100 business executives.
The visit sent a strong signal to Southeast Asia’s largest economy that Norway aims to forge closer bilateral ties, including through increased trade and investment, in the near future.
The Jakarta Post’s Linda Yulisman talked to Norwegian Trade Minister Trond Giske, who joined the delegation, about the prospects of economic relations between both countries and other issues. Below are excerpts of the interview.
Question: What did you expect from your trade mission to Indonesia?
Answer: Among other things, to lift awareness and knowledge about our two countries. Maybe the most important thing is that we know too little about each other. Indonesians don’t know so much about Norway and Norwegians don’t know so much about Indonesia. Increasing this knowledge, for Norway, is a way to increase cooperation and business opportunities.
We brought our businesspeople together because we think there are huge opportunities for boosting trade and investment between Norway and Indonesia.
It’s become a general perception that people are very impressed by Indonesia’s growth and we see Indonesia growing as an important economic power. That’s happening now and we want to be part of the development. We have world-class technologies and companies within some specific areas that can be very interesting for Indonesian partners.
You brought a lot of businesspeople with you in the delegation. What fields of business activities are they seeking in Indonesia?
We brought a wide range of businesses in the delegation, including in some areas where Norway has very strong clusters. The first one is the oil and gas sector - we are a major oil and gas nation. Our companies deliver a lot of equipment and services, especially in offshore technologies and also in the production and transportation of liquefied natural gas.
The second one is the renewable energy sector. Norway sources 100 per cent of its electricity from hydroelectric power plants.
The third one is the maritime sector. We have a big merchant fleet and big shipping companies. And Indonesia is one of the most important countries for this shipping fleet as it makes a lot of coal in Indonesian harbours. We also develop expertise in shipbuilding and construction, producing a lot of technology and advanced equipment for both transport ships and cargo ships, specialised vessels and fishing boats.
The fourth sector is infrastructure, especially tunnelling, road building and railroads, with the last sector being the agriculture and seafood sector.
Bilateral trade between Norway and Indonesia is still very small, according to statistics from Indonesia’s Trade Ministry. In your view, what factors contribute to this?
I think it’s because of a lack of knowledge about the opportunities. Actually, there are so many areas where we could work closely together. But the problem is that businesspeople don’t know about each other and by bringing people together like through this business forum is a way of starting that cooperation.
We haven’t put a certain target on the trade. Current trade doesn’t account for a big number yet.
But if you continue with high percentage growth that will eventually be a substantial number. So I’m very optimistic.
You currently trade a lot with China. How do you assess trade opportunities with Indonesia?
Well, Norway is not producing a lot of manufactured consumer goods, such as textiles and electronics, so most of them are imported. Our merchandise imports are mostly from China and that will continue to be the case. But with increased consumption and big spending power from Norwegian consumers, I think there is huge potential for Indonesian companies to find their way into this strong and growing market. We think Indonesia will increase its exports to Norway. In fact today, Indonesian exports to Norway have almost doubled. So, I think Indonesian businesses are absolutely competitive in Norway’s market.
(During January to August, bilateral trade totalled US$250.11 million, up 7.91 per cent from the past year, with Indonesia’s exports standing at $66.11 million, up 29.30 per cent, while imports were valued at $183.99 million, up 1.85 per cent, according to Indonesia’s statistics.)
Indonesia is currently negotiating a comprehensive economic partnership agreement with the European Free Trade Association. Do you think the partnership will make Indonesia more competitive in finding markets in Norway and more expectant to receive more investment from Norwegian companies?
Yes, absolutely. A good treaty on trade is a balanced one. So both countries will take benefits from the treaty. We always look for solutions that give both countries the best possibility of growing.
Norway is a very open economy. We have been open for many decades. We’ve exported up to 50 per cent of our production and that has been very helpful. It has increased productivity and given us technology transfer.
We have already invested around $800 million in Indonesian companies through our sovereign wealth fund, which is the biggest in the world and it will continue to increase. It might triple or quadruple within years and we are also putting more emphasis on Asia and emerging economies.
So, I think there are also huge possibilities for Indonesia to attract investment because of these reasons: the sovereign wealth fund is growing and we are putting more money in Asia and in emerging economies.
Of course, Indonesia fits the whole description: it has strong growth, it’s in Asia, is becoming a big economy and has interesting businesses. All that accounts for more investment in the future.