Joko Calls on British Businesses to Diversify in Indonesia as He Meets With PM Cameron

Jakarta Globe, Ezra Sihite & Novy Lumanauw, Jul 27, 2015

British Prime Minister David Cameron, left, with Indonesian President Joko Widodo
 meet at the Presidential Palace, Jakarta, on Monday. (Reuters Photo/Darren Whiteside)

Jakarta. President Joko Widodo asked Britain to diversify its businesses in Indonesia and lower import duties for Indonesian products entering the United Kingdom during his bilateral meeting with British Prime Minister David Cameron in Jakarta on Monday.

Joko told Cameron he welcomed Britain’s increased investments in Indonesia, which rose 34 percent last year, but added he wished Indonesia’s fifth largest foreign investor to diversify its range of businesses in the archipelago.

“I want to encourage Britain to diversify its investment in infrastructure development, including [for the construction] of sea ports, toll roads, railways, power plants and the maritime industry. Britain has vast experiences,” said Joko, who has repeatedly invited foreign nations to invest more in Indonesia to support his ambitious infrastructure development projects — including in the maritime sector.

“I also hope that Britain will impose lower import duties for Indonesian products, such as timber, clothing, coffee and fishery products,” he added.

Joko said Indonesia was committed to continually improving its economic partnership with Britain.

The Indonesian president also expressed his wish that Britain would reciprocate Indonesia’s visa-free policy applicable to British visitors.

“We hope that there will be a visa-free facility for Indonesian citizens [going to] Britain. This issue has been discussed during limited meetings,” Joko said.

Cameron in an e-mail interview with the Jakarta Globe on Sunday said his government would offer £1 billion ($1.55 billion) of credit financing for infrastructure projects in Indonesia.

A press statement from the British Embassy in Jakarta said the fund would be made available through Britain’s export guarantee scheme.

“This financing could pave the way for growth of £200 million worth of exports to UK,” the statement says.

It adds that projects “up for grabs” include a sewage treatment system in Jakarta worth £400 million and geothermal power projects worth £66 million.

Moazzam Malik, the British Ambassador for Indonesia, the Association of Southeast Asian Nations (Asean) and Timor Leste, on Sunday said that Britain was keen to offer Indonesia its vast expertise in a number of areas — specifically in maritime infrastructure development and maritime defense, satellite technology and public-private partnerships to finance infrastructure projects.

Cameron himself told the Globe in the e-mail interview: “The UK shares a common history as a maritime nation and while we may only have hundreds of islands compared to 17,000 here, we do understand the challenges that this presents and we want to share our experience and expertise to help develop this vital sector.”

“We have a wealth of experience in using advanced technology to monitor and manage our national waters and we are also a world leader in developing marine energy.”

The British prime minister is accompanied by a delegation of leaders of 30 prominent British brands in his two-day visit to Jakarta.

Among them are Airbus Group UK president Paul Kahn, Lloyd’s of London chairman John Nelson, Rolls-Royce international director Ann Cormack, Surrey Satellite Technology group executive chairman Martin Sweeting and UK Higher Educational Unit director Vivienne Stern.

Cameron is slated to attend a business forum with the Indonesian business community in Jakarta on Tuesday.

Jakarta is the prime minister’s first stop in his four-day tour of Southeast Asia which will include Singapore, Vietnam and Malaysia. Cameron had visited Indonesia once before, in 2012 where he met with then president Susilo Bambang Yudhoyono.

The Southeast Asian tour is Cameron’s first foreign visit outside Europe after his re-election in May.

The British Embassy says the tour is part of the British government’s efforts to increase the country’s exports to £1 trillion a year and to get 100,000 more British companies exporting by 2020.

“The prime minister is taking the first trade mission of the new parliament to a region [Southeast Asia] forecast to grow at 5 percent this year and with potential to unlock huge opportunities for jobs and growth in the UK,” the embassy says in the statement.

It adds that while the focus of the trip is about “opening doors” to future trade, deals worth over £750 million are expected to be sealed by the end of the trip.

On EU-Asean free trade

Aside from boosting bilateral trade, Cameron will also put his weight behind an European Union-Asean deal. He will call for the EU and Asean to jump start negotiations talks on a free trade agreement during his scheduled visit to the Asean secretariat in Jakarta on Monday evening, after the meeting with Joko.

A deal between these two trading blocs has the potential to benefit the British economy by £3 billion every year — nearly £120 per household — “by creating one of the biggest free trade areas in the world with combined GDP of over $20 trillion,” the press statement says.

Speaking ahead of the Southeast Asian tour, Cameron said Britain could open up more markets for its businesses by leveraging the power of the EU’s single market with 500 million consumers to secure “bold, ambitious trade deals with these fastest, growing economies.”

“The EU has shown this can be done with the trade agreement with Singapore and the recent breakthrough in talks with Vietnam but an EU-Asean trade deal would really turbo charge growth across the single market,” the prime minister was quoted as saying in the statement.

He added he would make the case in discussions with Asean Secretary General Le Luong Minh.

Cameron’s call comes as Asean countries prepare to establish an economic community by the end of this year.

The statement from the British Embassy notes that Australia, Japan and China “are already ahead of the game,” having implemented free trade deals with the Southeast Asian bloc.

“As the largest foreign investor in Asean, the EU should seize on this position to secure a new trade deal,”  it says.

To support Britain’s objectives in the region, Cameron has appointed a trade envoy specifically for the Asean Economic Community, Richard Graham.

Graham, who will join the prime minister for talks with Le, will take on the role alongside his existing role as trade envoy to Indonesia.

Joko on his part said Indonesia would restart this year its talks with the EU concerning Indonesia-EU comprehensive economic partnership agreement.