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We’re go!: Kadin executive Danny Jozal (right) with the Czech Industrialist, Jaroslav Hanák, in Jakarta on Monday after signing an agreement to mutually promote business opportunities between Indonesia and the Czech Republic.(JP/Nurhayati)
The private sectors of Indonesia and the Czech Republic paved the way on Monday for the deepening of trade and investment relations between the two countries, with the signing of agreements between players in the banking and industrial sectors.
Witnessed by visiting Czech President Vaclav Klaus, the Czech Export Bank signed a memorandum of understanding with the Indonesia Exim Bank in relation to finance cooperation in order to support bilateral export and import activities.
The Czech Republic’s Confederation of Industry also signed an agreement with the Indonesian Chamber of Commerce and Industry (Kadin) to promote business opportunities.
President Klaus said Czech businesses were largely unaffected by the crisis in the eurozone economies, thus giving them an advantage to expand business activities to other countries, particularly to the equally resilient Indonesia.
Klaus, who visited Indonesia in 1994 as the Czech prime minister, congratulated the country for its accomplishments so far, stating “the dramatic change is visible and we congratulate you for the achievement”.
His visit is the first by a Czech head of state since the establishment of diplomatic ties between the two countries in 1993, after the fall of communism at the beginning of the decade.
“We are happy to be here, to cooperate. But you know in our country, with 40 years of communism, the phrase that we used to use was cooperation. In my understanding there is a difference between cooperation and business. After the fall of communism, we don’t says let’s cooperate, we say let’s do business,” Klaus said, addressing a business forum in Jakarta.
Klaus, who was accompanied by Environment Minister Tomas Chalupa, Deputy Trade and Industry Minister Milan Hovorka and a delegation comprising 17 businesspeople, said he was optimistic about the future of economic relations between the two countries.
Meanwhile, Industry Minister MS Hidayat said on the sidelines of the seminar that Indonesia had insisted that Czech business players consider investing in the biggest economy in Southeast Asia by building factories, particularly for textiles and garments.
“Traditionally, the Czech Republic’s strong point has always been in its industries. In order to boost economic relations with Indonesia, we ask them to invest here. Some members of the delegation have also expressed an interest in investing their money, mainly in the capital goods industries like machinery and pharmaceuticals,” said Hidayat.
The minister added that the Czech Republic had also expressed an interest to put their money in the defense industry, particularly in producing radars, but added that the decision would be in the hands of Indonesia’s Defense Ministry.
The total value of bilateral trade between the two nations reached US$500 million in 2011, which, according to the Czech Republic’s Environment Minister Tomas Chalupa, is double that of 2005.
Danny Jozal, chairman of the Kadin Hungary, Czech Republic and Slovakia Committee, told The Jakarta Post that presently, export commodities from Indonesia to the Czech Republic mostly consist of machinery, textiles, garments and footwear.
“I am still studying their [Czech businessmen’s] profile. We are hoping that by signing the memorandum of understanding, we can get to know them better in the future,” he said.
Achmad Kurniadi, deputy chairman for investment cooperation at the Investment Coordinating Board (BKPM), said Czech investment in Indonesia was still very small, amounting to only about $36.6 million in four projects in the hospitality, metal, machinery and electronics industries.
“But this state visit will heighten the momentum of our relationship as both governments have agreed to expand economic relations,” said Achmad.
Achmad quoted the United Nations Conference on Trade and Development (UNCTAD) Investment Report 2011, which showed that direct Czech investment in Indonesia was $33.3 million in 2010.
Data at the Trade Ministry here, however, showed that the trade balance with the Czech Republic slid during the first quarter of this year, where Indonesia booked a deficit trade balance of $5.83 million, up 1,937 percent, compared to $286,000 in the first quarter of last year.
Czech exports to Indonesia consisted mainly of machinery, chemicals, electrical and power generation and telecommunications equipment, textile and machinery. Its imports from Indonesia comprised textiles and garments, footwear, rubber and rubber products. (asa)