Sweden cozying up to Indonesia

Veeramalla Anjaiah , The Jakarta Post , Jakarta | Fri, 04/25/2008 12:44 PM | World

Sweden, a small but rich Scandinavian country, is cozying up to Indonesia as part of its new strategic design to engage more with Asia, the new strategic center of gravity in the world's economies and politics.

Sweden, which is at the forefront of the global free trade and competition movement, attaches great importance to relations with China and India, the growth engines of the global economy. But Sweden is not only looking at India and China.

"If you look back to 15 years ago, we had bad relations with China. We are intensifying them (relations) now. But the development of ASEAN is also creating new opportunities," Swedish Foreign Minister Carl Bildt told The Jakarta Post in a recent interview in Jakarta.

With its status as ASEAN's largest economy, and third most populous country in Asia, Bildt said, Indonesia is increasingly attracting not only the attention of Sweden but also the rest of the world.

Bildt, Sweden's star politician -- who earned his stripes as a successful prime minister (between 1991 and 1994) and as Europe's top peace negotiator -- was in Indonesia earlier this week at an invitation from his Indonesian counterpart, Hassan Wirayuda.

"This is the first bilateral visit by a Swedish foreign minister to Indonesia. I came here to further intensify the strategic relationship between Sweden and Indonesia," Bildt said.

During his two-day stay in Jakarta, Bildt met with Hassan to discuss ways and means to develop the existing relationship, and exchange views on regional and international issues. Both leaders also discussed a possible visit by President Susilo Bambang Yudhoyono to Sweden before the end of the year.

"We talked about our relationship with Indonesia in strategic terms," said Bildt, who is also a popular blogger in Sweden.

While commenting on economic relations, Bildt said both countries had enormous economic potential.

With its population of only nine million, but with a GDP per capita of $36,900, Sweden has earned its fame as a hub for high-tech industries like telecommunications and hydropower, and as one of Europe's leading exporters. Last year, Sweden's exports reached $176.5 billion, much higher than Indonesia's $114.1 billion for the same period.

"In the field of economics, we are opening a small Swedish Trade Council office in Jakarta. It will encourage Swedish businesspeople to be more active in the Indonesian market," Bildt said.

Sweden's giant companies like Ericsson, ABB, SKF, Chubb, Ekamant and Perstop have already been present in Indonesia for some time. Telecommunications giant Ericsson celebrated its 100th birthday in this resource-rich archipelagic state, last year.

Swedish companies, both old and new, are reluctant to invest large amounts in Indonesia however, despite the huge potential. Bildt met with members of the Swedish Business Association in Jakarta during a breakfast meeting, to exchange views on doing business in Indonesia.

"They testified to the enormous economic potential, but they also testified to some of the problems -- some of them were regarding the legal system, some were regarding infrastructure and some were referring to what they called ... hidden protectionism in different fields.

"That could be an explanation for this situation (low amounts of investment)," Bildt said.

While bilateral trade between Indonesia and Sweden has been growing constantly from year to year, it is still considered to be a fraction of the economic potential of both countries.

Last year, the total value of bilateral trade jumped to $883.07 million, a 13 percent increase from $781.50 million in 2006. In 2003, the total trade stood at just $301.79 million.

There is also a problem of trade imbalance, which is presently heavily tipped in favor of Sweden, thanks to Swedish telecommunications products. Sweden's exports to Indonesia jumped to $773.24 million in 2007, a 19.68 percent increase from $646.10 million in 2006, meanwhile Indonesia's exports to Sweden stood at $109.82 million in 2007 -- an 18.89 percent drop from $135.40 million in 2006.

In response to a question on defense ties between Sweden and Indonesia, Bildt said Sweden, which has a diversified defense industry, could supply defense equipment to Indonesia.

"Though it is not on the agenda for this historic visit, the offer is there, so I am quite certain there would be supply equipment that could be of interest," Bildt said.

Besides trade and investment, Bildt said, Sweden would focus more on human rights in Indonesia.

"We are now opening a more intensified dialog on human rights issues," Bildt said.

When Sweden takes on its EU presidency next year, Bildt said, his country would also focus on climate change issues.

"We are looking forward to closer cooperation with Indonesia on matters of the environment and sustainable development," Bildt said.

Both countries have realized the significance of enhancing their relations.

A few years ago this was largely impossible, given diplomatic wranglings between Sweden and Indonesia over the presence of GAM (Free Aceh Movement) leaders in Sweden. Indonesia's relationship with Sweden reached a low point when Jakarta refused to send its ambassador to Stockholm for more than four years.

After the deadly tsunami of 2004 and the Helsinki peace agreement of 2005, Sweden and Indonesia agreed to put their differences aside and embark on a new era of friendship and cooperation.

In fact, Bildt said, Sweden had played a role in persuading GAM leaders to give a peace a chance.

"I won't exaggerate our role, but they (GAM leaders) were in Sweden. When the Helsinki talks started, we encouraged them to take the opportunity to make peace, and they did -- which I think was very good," Bildt said.

Comments (0) | Post comment

A | A | A |