RI, India must work hard to forge strategic partnership: Envoy

The Jakarta Post ,  Jakarta   |  Mon, 12/11/2006 1:37 PM

Veeramalla Anjaiah, The Jakarta Post, Jakarta

Indonesia and India not only share a very long history of association and cultural contacts but also enjoy a convergence of strategic interests. Both now want to turn this centuries-old relationship into a new strategic partnership.

Both countries' leaders -- President Susilo Bambang Yudhoyono and Prime Minister Manmohan Singh -- agreed on this new partnership in November 2005, when Yudhoyono visited New Delhi. They hope to see the trade between two countries, currently at around US$4 billion, reach $10 billion by end of this decade.

Though the close ties between the two make strategic sense for both countries, the question is whether they can achieve the target.

""It's difficult. But with the proper strategies from both countries, I think it is possible. We have to work hard to achieve this,"" India's new Ambassador to Indonesia, Navrekha Sharma, who submitted her credentials to President Yudhoyono on June 25, 2006, told The Jakarta Post recently in an interview at her office in Jakarta.

Sharma hailed the recent positive trends in both countries' relations.

""First, there is a big change in Indonesians' attitudes toward India. They are now looking at India differently compared to a decade ago or so,"" Ambassador Sharma said.

She said same thing was happening on the Indian side.

""After adopting our Look East policy in 1991, India's interaction with Indonesia and other ASEAN countries has increased by many folds. More and more Indian companies are coming here to start their businesses,"" Sharma said.

Indian automobile companies like Bajaj and TVS, steel producer Essar, IT firm Tata Consultancy, the State Bank of India and other companies have opened their businesses in Indonesia.

""It's a positive sign,"" Sharma said. ""That's why it's not a surprise to see a big jump in bilateral trade and investments.""

""The trade was just $400 million to $500 million in the mid-1990s. Now you see the bilateral trade reached around $4 billion in 2005,"" Sharma said, adding that there was great scope for improvement given both countries' economic potentials.

Bilateral trade between Indonesia and India reached around $4 billion in 2005, a big jump from $3.27 billion in 2004. The trade was heavily in favor of Indonesia, with its exports to India reaching $2.90 billion in 2005, while Indian exports to Indonesia were just $1.10 billion in the same period

Indonesia mainly exports palm oil, copper ore, coal and fruit to India and imports hydrocarbons, food goods and flat rolling products from India.

When asked about how she planned to accomplish her mission in Indonesia, Sharma said both countries must remove the existing hurdles to spur growth in trade, investment and other areas.

""For example, both countries do not have a direct air link. This is an essential item to improving the situation. At present, only businesspeople and professionals are visiting the two countries. Neither Indian tourists are coming to Indonesia nor Indonesian tourists visiting India. I will focus on this,"" Sharma said.

""I think we need an aggressive promotion of Indonesia in India and vice versa.""

As far as the other issues are concerned, Sharma said both countries needed to take drastic measures to ensure trade was diversified and more balanced.

""Still, there are some areas which are not opened to India. There are more and more products to be traded,"" Sharma said, referring to Indian beef exports and pharmaceutical products.

""In both cases, our products are high quality and cheaper. Malaysia and the Philippines have been importing Indian beef without any problem. Indian beef exports fulfill all the OIE regulations,"" Sharma said.

Both Indonesia and India are members of the OIE, the World Organization for Animal Health.

Indonesia could allow India to export medicines to Indonesia, she said.

""Indian pharmaceutical companies are heavily exporting medicines to the U.S. But we are facing some problems in selling our medicines, which are cheap but high quality, here,"" Sharma said.

""Outdated ideas and non-tariff barriers must be removed. The trade basket must be diversified by adding various products,"" Sharma said.

She said that investment needed to come from both sides.

""Indian investors have been coming to Indonesia since the 1970s. Indians have a $1.7 billion cumulative investment. All these years, the investment is coming to Indonesia only. But no investment is coming from Indonesia. It's good now one Indonesian company, the Salim Group, wants to invest in India,"" Sharma said.

With its 1.1 billion-person market, India -- which is poised to become world's third largest economy by 2050 -- can offer many things to Indonesia, she said.

""We are the leading player in knowledge-based industries, like information technology and life sciences. We can help Indonesia,"" Sharma said. ""Why can't we share our resources, experiences and knowledge between us?""

India donated around $3 million to Indonesia after the recent tsunamis and earthquakes.

Sharma said India had built two vocational centers in Jakarta and Aceh and was also offering 150 scholarships to Indonesian officials and students.

In the space and defense sectors, both countries have been working together for many years.

Yudhoyono and Singh pushed the idea that the strengthening of bilateral relations must be based on shared values and a commitment to democracy and multilateralism.

Copyright © 2008 The Jakarta Post - PT Bina Media Tenggara. All Rights Reserved.