JAKARTA: Pakistan, a rising star in South Asia, wants closer trade, economic and defense ties with Indonesia, Pakistani Ambassador to Indonesia Maj. Gen. (ret) Ali Baz said. “Our relations with Indonesia are the most ideal and they are in excellent shape. But we have to enhance our economic ties and further increase bilateral trade, which is at present much below to our true potential,” Baz told The Jakarta Post recently, alongside his country’s 60th independence anniversary celebrations. Bilateral trade between Pakistan and Indonesia is currently close to US$800 million. The trade balance has been tilted heavily in Indonesia’s favor due to significant Pakistani purchases of palm oil, coal and tea.
According to Baz, Pakistan imported $734.09 million worth of Indonesian goods in 2006, while exporting only $35.66 million in the same year, a significant decrease from $46.13 million in 2005.”During the last two years our exports to Indonesia were affected by the increase in tariffs by Indonesia to 25 percent from 5 percent on our kinos (oranges). Otherwise our exports would have been much higher,” Baz said.
Pakistan’s main exports to Indonesia are cotton yarn, textiles, medical equipment, fruit, rice, wheat and carpets.There are expectations that this year’s trade could surpass last year’s figure. During the first four months of 2007, bilateral trade already reached $266.56 million, $244.56 million of it in the form of exports from Indonesia. During President Susilo Bambang Yudhoyono’s visit to Pakistan in 2005, Baz said, both countries’ leaders agreed to a target of $1 billion in bilateral trade per year, to be reached in the shortest possible time.
Baz said that, as part of efforts to reach this target, Pakistan and Indonesia are currently negotiating a Preferential Trade Agreement (PTA) under which both countries would significantly reduce tariffs on each other’s products.”In fact, we have already completed three rounds of negotiations for the PTA and the next, as well as final, round will be held this month (Sept. 20-21). Once we conclude this PTA, increasing the bilateral trade to $1 billion is not difficult. The imbalance in trade will also be removed,” Baz said.
According to Baz, a large number of Pakistani exports that could be attractive to Indonesia, in particular cotton and textiles, sports equipment, surgical equipment and rice.
He added that Pakistan exported more than $8 billion worth of cotton and textiles around the world between July 2006 and April 2007. “Our surgical equipment producers are coming to Jakarta this month to participate in an exhibition,’ Baz said.
Baz also said that Pakistan wanted to revive its rice exports to Indonesia. Pakistan previously supplied large quantities of rice, especially its Irri-6 sticky rice, to Indonesia in the 1980s and early 1990s. However, that trade has since collapsed. Baz said he had already made efforts to convince Indonesia’s leading property firm Ciputra Group to invest in Pakistan.”Ciputra Group is currently negotiating with (the Pakistani) government about their investment in (the) property sector. I hope the negotiations will (be) complete soon,” Baz said. Baz said another Indonesian firm, PT Moeladi, was interested in joining a fuel pipeline project in Pakistan.
In an effort to open up the country for business, Baz said Islamabad had last year unilaterally granted a visa-on-arrival facility for Indonesian businesspeople “Indonesian businesspeople now don’t even need a visa to go to Pakistan,” Baz said. Economic and structural reforms by President Gen. Pervez Musharraf and Prime Minister Shaukat Aziz have seen Pakistan emerge in recent years as a darling of foreign investors.
“Foreign direct investment in Pakistan reached a record $8.4 billion last year. For a country like Pakistan, this is a huge figure. I invite Indonesian investors to invest in Pakistan,” Baz said. Baz said most new investment was in the information technology, telecommunications, banking and property sectors. Such growth has been unprecedented in Pakistan’s 165-million-consumer-strong market. Just one example is the jump in Pakistani cell phone users from 300,000 in 2000 to 50 million people today. Baz said high-level visits from both sides had rapidly accelerated the deepening of the Indonesia-Pakistan defense relationship.
“These visits (have) provided an impetus to our defense ties. Our vision is that we should not (be) confined to just buying and selling (defense equipment). We should share knowledge, expertise and military experience,” Baz said, adding that Pakistan and Indonesia had an excellent record of intelligence cooperation against terrorism. Pakistan, the Islamic world’s only nuclear state, has put itself on the front line of the U.S.-driven war against terrorism, while Indonesia itself has experienced a number of terror attacks from extremists in recent years.
Baz said Pakistan’s 60th anniversary of independence saw the country entering a new era of challenges and opportunities. “It’s a significant event in our history. This event comes at a time when Pakistan is trying to overcome the serious challenges posed by terrorism, on one side, and to utilize the opportunities that are there to progress further,” Baz said.The year he has already spent in Indonesia, the ubiquitous general-turned diplomat has skillfully nurtured and grown Indonesia and Pakistan’s multi-faceted bilateral relationship.
Baz has also appeared to have developed a special affection for Indonesia. “I don’t hesitate to admit that I consider myself half Pakistani and half Indonesian. So Indonesia is as dear to me as Pakistan,” said Baz, who speaks fluent Indonesian. Baz was in fact a classmate of President Yudhoyono at the Army’s Staff and Command School (SESKOAD) in Bandung in 1988 and 1989. Baz said he would not use his time in Indonesia to pursue deals that would only advantage his country.”I will never endeavor to float anything which is only beneficial for Pakistan and vice versa. It has to be mutually beneficial for both countries,” he said.-SANA