Andi Haswidi, The Jakarta Post, Jakarta
Indonesian business leaders and their Japanese counterparts are to meet next week to identify mutual opportunities from the Economic Partnership Agreement (EPA) between the two countries.
""Members of the Indonesian Chamber of Commerce and Industry (Kadin) have prepared dozens of business proposals for their Japanese counterparts,"" Kadin chairman Mohammad S. Hidayat said after a meeting with economic ministers Friday.
Hidayat said that about 200 top business leaders from the Japan Business Federation (Nihon Keidanren) were expected to accompany Prime Minister Shinzo Abe on his visit next week and meet with about 250 Indonesian business leaders to discuss trade and investment opportunities under the EPA framework.
The Japanese prime minister is scheduled to arrive here Aug. 19 to sign the long-awaited Indonesia-Japan EPA with President Susilo Bambang Yudhoyono on Aug. 20.
Under the EPA, Indonesia will cut tariffs on about 93 percent from the existing 11,163 tariff items, with 58 percent of the tariffs being eliminated upon the signing of the agreement, which will become effective after the House of Representatives ratifies it.
In return, Japan will eliminate more than 90 percent of its existing 9,275 tariff items, of which 80 percent will be eliminated immediately, including tariffs on textile and agricultural products.
Indonesia's total exports to Japan in 2006 amounted to $21.7 billion, while total imports from Japan stood at $5.5 billion.
According to Mahendra Siregar, the deputy for international economic cooperation to the coordinating minister for the economy, Japan was expected to also expand its investment in Indonesia under the EPA, especially in the automotive and electronics sectors.
""Daihatsu, Yamaha and Panasonic are among the companies that will expand their investments in Indonesia. We expect a snowball effect in terms of growth in the components sector,"" Mahendra said.
Outside the EPA agenda, Abe is also expected to witness the signing of joint investment deals in the energy sector Monday, mainly involving gas exploration, which are estimated to be worth up to US$4 billion.
""On top of these deals, Energy and Mineral Resources Minister Purnomo will add other deals worth about $2 billion,"" Hidayat said, without elaborating.
Also on Monday, Abe will deliver a speech at an exclusive business luncheon hosted by Kadin at the Grand Hyatt Hotel, Jakarta, which will be attended by Vice President Jusuf Kalla, economic ministers from both countries, 25 business leaders from Japan and another 25 from Indonesia.
""At the luncheon, the Vice President, accompanied by the ministers, is expected to brief the guests on the improvements in our investment climate, and assure them of the commitment of the Indonesian government to the EPA,"" Hidayat said.
He said that Finance Minister Sri Mulyani Indrawati would brief the guests on the reform of customs and tax regulations, while Trade Minister Mari Elka Pangestu would do so on trade-related issues.
A simulation of the benefits that might accrue from the EPA show that Indonesia's total exports, which hit more than $100 billion last year and are expected to grow this year by 14 percent, could grow by another 4.68 percent a year after its implementation.
