The Jakarta Post
Economic cooperation between Indonesia and Sweden has shown remarkable improvement in recent years as indicated not only in the increase in the number of visits between the countries' senior officials but also in the surge in business-to-business relations.
Swedish Ambassador to Indonesia Ewa Polano said on Friday in Jakarta that several Swedish companies engaged in a wide range of business had made firm commitments to do business in Indonesia.
The ambassador said that investment from her country was growing and was estimated to reach at least US$400 million within the next few years.
Power transmission and industrial automation technology group ABB, furniture chain IKEA, retail store H&M and electric car maker Clean Motion AB have expressed a keen interest in investing in Indonesia, she said.
ABB will soon build two new power plants in Tangerang and Cibitung with a total investment of $25 million each and Clean Motion AB will produce bajaj-like electric car ZBee in a few months with a total investment of up to $100 million, Polano said.
IKEA will open three stores in Indonesia with a total investment of $300 million over the next few years. The first store, worth about $125 million, will open in Alam Sutera in Tangerang, Banten, in July 2014, whereas H&M has committed to opening two stores in September at Gandaria City and Pondok Indah in Jakarta with an unspecified amount of investment.
Currently, Sweden investment is much lower compared to that from other European countries, such as United Kingdom or France. Last year, Swedish investment totaled only $5.2 million in 11 projects, according to Investment Coordinating Board (BKPM) data.
Polano said bilateral relations had reached an all-time high, marked by the exchange of high-level state visits by leaders of the two countries.
President Susilo Bambang Yudhoyono last month paid a historic visit to Sweden to meet with Swedish King Carl XVI Gustaf and Prime Minister Fredrik Reinfeldt. This followed a visit by the Swedish king to Indonesia early last year and by the prime minister late last year.
'Bilateral relations between Sweden and Indonesia have, in fact, never been so good as it is now with these high-level visits. This has led to a good opportunity to develop our relations, and therefore I see that we now have an excellent platform for deepening our relations,' Polano told The Jakarta Post in an interview.
During Yudhoyono's visit, the two countries sealed a number of bilateral agreements, either under a government-to-government arrangement or a business-to-business plan. These included agreements on sustainable urban development; research, science and innovation; environmental and healthcare cooperation; and sustainable wood furniture production.
Polano said that in addition to investment, closer economic relations could be achieved by way of trade, which still had enormous room for growth, although neither country had set a specific trade target within a particular time frame.
'Trade feeds trade, and relations in trade between our countries need to develop in areas that Indonesia can export to Sweden,' she said. The Swedish market still offers myriad untapped opportunities for Indonesian exporters, particularly for products in which Indonesia has a competitive edge, such as furniture products, palm products, art products, seaweed and textiles, Polano further said.
Two-way trade amounted to $1.47 billion in the past year, up 28 percent from 2011. Indonesia shipped $166.28 million worth of goods and commodities, including palm oil, furniture and textile products last year, while purchasing goods such as machinery, medical equipment and pharmaceutical products worth $1.3 billion, resulting in a $1.13 billion deficit.
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