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Number VI / May 2017 | Trade & Investment Bulletin 1
Number I | September 2016
0
U.S. Vice President Mike Pence Visits Indonesia
Photo: US Vice President Mike Pence listens to Indonesian President Joko Widodo at Merdeka Palace in Jakarta on April 20 (http://www.cnn.com/2017/04/22/opinions/us-indonesia-pence-ties/)
EDITOR’S NOTE Dear Readers,
The charm of Bali is never ending. Trip Advisor
has chosen Bali as the best tourism destination
in the world in 2017. Thanks to its traditional
values which combine with modern life that
has become a great attraction for tourist from
all over the globe.
The U.S.A. is one of the top five foreign
investments by country in the first quarter of
2017, ranked fourth with US$587.4 million
investment between January and March.
Indonesia's agriculture products such as
mangosteen, bananas, star fruit, snake-fruit,
rambutan, round coconut, cabbage, cauliflower,
and flowers have been exported to 29
countries. Nevertheless, Indonesia is still
seeking the opportunities to market its
products to U.S.A. through a partnership.
U.S. Vice President Mike Pence Visits Indonesia 1
Sri Mulyani: Asia’s Best Finance Minister 2
Indonesia Foreign Minister visit the US to Strengthen Strategic Partnership 2
Trip Advisor: Bali, Indonesia – One of the top 25 Destinations in the World 3
BKPM: The US Makes the List of Top-5 Foreign Investment by Country 4
Indonesia – U.S. Trade Overview 4
Indonesian Tropical Fruits to World Markets 5
Indonesia's Horticultural Products – a Great Demand in Many Countries 6
Domestic Production, Export, and Consumption of Indonesian Coffee 7
Indonesia Organic Products 10
For more detail information please contact: Economics Affairs - Consulate General of the Republic of Indonesia 211 W. Wacker Drive #8 Chicago, Illinois 60606 Phone: 312.920.1880 Fax: 312.920.1881 Email: [email protected] Website: www.kemlu.go.id/Chicago
U.S. Vice President, Mike Pence visited
Indonesia on April 19 – 21 as part of his 10-
day visit to Asia.
His visits consist of meetings such as
meeting with the President of Indonesia,
Joko Widodo and Vice President Jusuf Kalla,
as well as celebrating the 50th
anniversary
of the Association of Southeast Asian
Nation (ASEAN) and the 40th
anniversary of
US ties with the group.
During his visit to Jakarta, the country's
capital, Pence declared "As the largest
majority Muslim country, Indonesia's
tradition of moderate Islam, frankly, is an
inspiration to the world," Pence declared.
He added that the United States commends
Indonesia and its people "for the great
inspiration that Indonesia provides to the
world."
The visit has resulted in signing 11
commercial and investment agreements
between U.S. and Indonesian companies
that amounted to USD 10 billion over time.
The deals include Lockheed Martin
providing an advanced weapons targeting
system for Indonesia's F-16 fighter jets,
ExxonMobil selling 1 million tons of liquid
natural gas to state-owned oil and gas
company Pertamina for 20 years starting in
2025, Honeywell supplying turboprop
engines to Indonesian aerospace company
Dirgantara, and a USD 2 billion electricity
metering system organized by a
consortium of companies.
Number VI | May 2017 More articles available at: www.kemlu.go.id/chicago
2 Trade & Investment Bulletin| Number VI / May 2017
Sri Mulyani: Asia’s Best Finance
Minister
Photo: Sri Mulyani, Indonesia Finance Minister (http://thejak.co)
Indonesia Foreign
Minister Visits the
United States to
Strengthen
Strategic
Partnership
Photo: Retno Marsudi, Indonesia Foreign Minister meets with US Vice President, Mike Pence in Washington, D.C. (www.kemlu.go.id)
According to Finance Asia’s, Sri Mulyani
Indrawati is a worthy winner of 2017
Finance Asia’s Finance Minister of the
Year award. Sri Mulyani Indrawati was
appointed as Indonesia’s Finance Minister
last July, returning to a job she held
between 2005 and 2010.
Sri Mulyani emphasized improving the
efficiency of tax collection, a crucial step
for Indonesian Government in order to
get its wealthiest citizens to declare their
assets.
The Hong Kong-based financial journal, in
its article explained why Sri Mulyani was
their top pick. They have noted that she
has been particularly successful in
improving the Indonesian government’s
revenue streams, which had failed to hit
the mark for the last seven years.
This success also came along with the
implementation of tax amnesty program
that had been launched before Minister
Indrawati started the job where in July
last year, Sri Mulyani accepted the
position to head the Finance Ministry
under President Joko "Jokowi" Widodo,
succeeding Bambang Brodjonegoro after
he left to head the National Development
Planning Agency (Bappenas).
Bambang jump-started the national tax
amnesty program, but Finance Asia said
that Sri's "fearsome reputation" was
"undoubtedly crucial" to its continued
success. Indonesia's tax amnesty has
been lauded as one of the most
successful programs of its kind, with
participants declaring Rp 4,590 trillion
($344 billion) worth of assets previously
hidden from government oversight.
The early take-up of the tax amnesty was
far lower than the administration had
sought after.
Minister Indrawati has also pushed for
cuts in spending, slashing government
expenditure by 3% last year. This two-
pronged approach is economics 101 in
balancing the budget. However, it is a
rarity in a region where tax collection
often disappoints, and governments
often overspend.
(continue page 3)
The Indonesia Foreign Minister visited
Washington, D.C. on 4-5 May 2017. The
purpose of her visit is to follow up on US
Vice President Visit to Jakarta last month
as well as to strengthen Indonesia – US
Strategic Partnership through mutually
beneficial cooperation for the people of
both countries.
The Minister visits consist of meetings with Secretary of State, Rex Tillerson, Speaker of the House, Paul Ryan, and the Assistant to the President for Homeland Security and Counterterrorism, Thomas P. Bossert. The issues that were raised during the meetings include mutually beneficial economic cooperation, common efforts in countering terrorism and radicalism through soft power, cooperation in maintaining stability and peace in the region as well as resolving the Palestine-Israel Conflict.
Number VI / May 2017 | Trade & Investment Bulletin 3
Number I | September 2016
Indonesia achieved a dramatic narrowing
of its current account deficit in the last
quarter of 2016 with household
consumption improving and
infrastructure investment is on the rise.
(Source: Finance Asia)
Trip Advisor: Bali, Indonesia - One of the top 25
Destinations in the World
According to Trip Advisor – 2017
Travelers’ Choice, Bali in Indonesia
ranked the first spot among other 24
cities in the world, including locations
throughout Asia, Northern Africa, The UK,
USA, Latin America, and Australia.
Before Hollywood caught on (aka Eat Pray
Love) to the charm of Bali, travelers have
been flocking from near and far to
experience the fantastic organic foods,
spiritual experience and colorful sunsets
on offer. But perhaps no place is as
serene and surreal as Ubud, lying in the
center of Bali with its’ pristine rice fields,
rolling hills, and friendly locals. It is the
best destination to surf, bike and for a
yoga retreat.
Also known as the Land of the Gods, Bali
appeals through its sheer natural beauty
of looming volcanoes and lush terraced
rice fields that exude peace and serenity.
Bali enchants with its dramatic dances
and colorful ceremonies, its arts, and
crafts, to its luxurious beach resorts and
exciting nightlife. And everywhere you
will find intricately carved temples.
Bali’s white beaches are one of the
favorite places to go for family holidays.
There are a variety of water sports
available, such as banana boats,
parasailing or jet skiing, swimming or
plain sunbathing. Most well known
among Bali’s beaches is Kuta. Along with
this stretch of Kuta are an array of hotels,
restaurants, shops and cafes. In the
evenings the area throbs to the beat of
disco music. For a quieter evening enjoy
the beach at Jimbaran, a popular spot to
eat fresh barbecued seafood. Sanur
Beach also dotted with hotels and
restaurants. You can also visit Nusa Dua,
where more private beaches are located
front at the luxurious hotels.
Surfers love the waves at Nusa
Lembongan near Nusa Penida. These
islands are a 45 minutes boat trip
from Nusa Dua or from Sanur. At Nusa
Penida’s southwestern coast are the
Manta Point and the Malibu point where
divers can swim with Trevally, big rays,
and even sharks. The best dive spots are
at Menjangan with its reef flat, anchor
wreck, eel garden and caves to explore.
(Source: www.indonesia.travel)
4 Trade & Investment Bulletin| Number VI / May 2017
BKPM: The US Makes the List of Top Five Foreign
Investment by CountryThe Investment Coordinating Board
(BKPM) reports that the United States has
made it into top five foreign investments
by country in the first quarter of 2017.
US ranked fourth with US$587.4 million
investment between January and March.
“US investment is substantial. I hope the
US can continue to at least be in the top
7,” the BKPM chairman Thomas Lembong
said yesterday in Jakarta.
Lembong underlines Indonesia’s economic
ties with the US, which was reflected in the
US Vice President Mike Pence’s visit to
Jakarta last week.
Thomas also stressed the importance of
Chinese investment that reached US$599.6
in the first quarter this year. The figure
puts China in the third place, behind
Singapore (US$2.1 billion) and Japan
(US$1.4 billion).
The former trade minister said that
Chinese investment in Indonesia continues
to grow above average in recent years
compared to other countries.
“China is already the world’s second-
largest economy and Asia’s number one.
So, it would be natural if it becomes
number one in Indonesia,” he said.
Thomas even said that Chinese investment
in Indonesia is smaller than its investment
in the neighboring countries.
“We lag behind the neighboring countries.
I believe the trend is apparent, Chinese
investment will continue to increase,” he
said.
Data from the BKPM show that Indonesia
experienced Rp165.8 trillion investments
in the first quarter of 2017 or 24.4 percent
of the full-year target of Rp678.8 trillion.
The figure was a 13.2 increase compared
to the same period last year at 146.5
trillion and created 194,000 new jobs.
Domestic investment realization reached
Rp68.8 trillion, a 36.4 percent increase
compared to the same period last year.
Meanwhile, foreign investment realization
stood at Rp97 trillion, a 0.94 percent
increase compared to last year.
(Source: Tempo.co)
Indonesia – U.S. Trade Overview
Photo: fas.usda.gov
Indonesia is the most populous Southeast
Asian nation and is the largest market in
the region for U.S. agricultural exports,
which totaled $2.7 billion in 2016.
Indonesia ranks as the United States'
ninth-largest market worldwide, with top
U.S. agricultural exports including
soybeans, cotton, feeds and fodder,
wheat, and dairy products.
While bilateral trade continues to grow,
Indonesia has increasingly adopted trade
restrictive measures in an attempt to fulfill
food self-sufficiency goals.
During the global financial crisis, Indonesia
outperformed its regional neighbors and
joined China and India as the only G20
members posting growth.
Indonesia’s annual budget deficit is capped
at 3% of GDP, and the Government of
Indonesia lowered its debt-to-GDP ratio
from a peak of 100% shortly after the
Asian financial crisis in 1999 to less than
25% today.
Moody's Investors Service on February
8th, 2017 revised the outlook on
Indonesia's government ratings to positive
from stable.
President Joko Widodo - elected in July
2014 – develops Indonesia’s maritime
resources and pursues other infrastructure
development, including significantly
increasing its electrical power generation
capacity. Fuel subsidies were significantly
reduced in early 2015, a move which has
helped the government redirect its
spending to development priorities.
(Source: fas.usda.gov; Indexmundi.com;
cia.gov)
Number VI / May 2017 | Trade & Investment Bulletin 5
Number I | September 2016
Indonesian Tropical Fruits to World Markets “Equipped with more than almost 30 years of industry know-how and the latest technology, Fruit-ING is set to manufacture high-quality tropical fruit pulps and juices US, European and Japanese standards. We are experienced in Tailor-Made fruit products as
well as Standard pulps and juices, all of which are 100% natural and made from the freshest produce possible.”
As a country that is crossed by the
equator, Indonesia is a suitable place for
the plantation of many types of tropical
fruits. The varieties include snake fruits,
rambutan, banana, and much more, which
are certainly difficult to be found in non-
tropical countries. Indonesian local fruits
are not only delicious to eat but also rich
in nutrients.
Fruit ING, a processed fruit company
located in Gresik, East Java, is a company
that produces fruit pulps and juices as the
superior products export to the United
States and several Asian countries, Japan
and South Korea.
Some of its popular fruit pulps products
are made of acerola, cantaloupe, coconut,
gac-fruit, honeydew melon, jackfruit,
mango, mangosteen, noni, papaya,
passion fruit, pineapple, rambutan, snake
fruit, soursop, tamarind, and watermelon.
The Managing Director Iwan Winardi
shared his views on business development
opportunities of the Indonesian tropical
fruit product. His understanding of
Indonesia’s abundant agriculture and
plantation including fruits with diverse
variants and nutrition led him to become a
businessman.
The ability to manage his time and control
profit is the advantages which encourage
his passion of being a business man.
"Indonesia has many kinds of potential
export fruits, such as mangoes, guavas,
soursop, s
trawberries, bananas, pineapples, and
much more,” he said.
Those sorts of fruits are typical and only
growing in tropical lands. He believes that
with this uniqueness, Indonesia can
compete with other tropical countries
selling similar products.
Key to Access World Markets
“I collect the fruits from all around our
environment as an export commodity,"
said Iwan. However, not all fruits from
farmers are acceptable for export. The
company implements tight standards that
ensure selecting only high-quality fruit for
export.
To gain high-quality products which meet
the market demand in the U.S. and
Europe, FruitING also implements strict
procedures on the fruit selection and
packaging process. The company selects
non-synthetic pesticides and non-
synthetic fertilizers for fruits from its
trusted farmers. The contract is made
6 Trade & Investment Bulletin| Number VI / May 2017
between Fruit ING and the farmers to
ensure the quality of fruits.
In addition to the fruit selection phase, the
company is also paying attention the
production process to ensure the products
are receivable on the targeted markets. To
meet the export standard, Fruit ING uses
production machines from Europe. “To
meet their (developed countries) demand
and need, Fruit ING uses Tetra Pack
machine for the food and beverage
packaging process. It is the key (to access
their markets)," said Iwan.
Imported from Sweden, the packaging
system combines the process of aseptic
with UHT that allows products to survive
without refrigeration for up to one year. It
also provides quality assurance for the
processing and packaging of food and
beverages. "The quality of the products
produced by the machine has been tested
and trusted by the market, especially the
main markets in America and Europe,"
said Iwan.
(Source: Indonesia Invites)
Indonesia's Horticultural Products - A Great Demand in
Many CountriesIndonesia has a number of superior
horticultural products such as
mangosteen, star fruit, snake fruit and
rambutan.
Good quality products have been
exported regularly to other countries,
such as mangosteen which in 2016 was
exported to 29 countries on a regular
basis.
In 2016, Indonesian vegetables such as
cabbage and cauliflower with the amount
up to 40,240 tons and about 77 kinds of
other vegetables were exported to
Taiwan, Malaysia, Singapore, Thailand
and the Netherland. Those commodities
bring the economic value and trust from
the consumers in the destination country.
Similarly, the export of Indonesian fruits
such as coconut, mangosteen, and
bananas and 176 other types of fruit
reached 564,372 tons and have a high
demand from world consumer.
Indonesian coconut has been exported
routinely to China, Thailand, Japan and 16
other countries. Meanwhile, Japan,
China, and Malaysia rank as the 3rd
largest importer of bananas from
Indonesia.
Besides fruits and vegetables, Indonesian
horticultural products in particular
frangipani flower, jasmine, and
chrysanthemum are also experienced
high demand from Korea, Malaysia,
Vietnam and several other countries. The
export to those countries reached 4,982
tons.
Based on the export data in 2017
(January to March), the Indonesian
horticultural product remains in high
demand in their recipient countries.
The export of vegetables such as
cabbage, beans, and watercress reached
132.878 tons.
While the export of coconut,
mangosteen, and banana reached
173,865 tons periodically and has been
exported to Thailand, Malaysia, China and
20 other countries.
Meanwhile, the export of jasmine and
frangipani flowers to Cambodia, Vietnam,
Thailand, China, and Singapore reached
1,067 tons.
(Source: Pertanian.go.id)
Number VI / May 2017 | Trade & Investment Bulletin 7
Number I | September 2016
Domestic Production, Export, and Consumption of
Indonesian Coffee Indonesia is the world's top coffee
producing and exporting countries. Most
of the production constitutes the Robusta
type. Indonesia is also famous for having
a number of specialty coffees such as
'Kopi Luwak' (known as the world most
expensive coffee) and 'Kopi Mandailing'.
Among agricultural commodities, coffee
is Indonesia's fourth-largest foreign
exchange earner after palm oil, rubber,
and cocoa.
Coffee was introduced to the archipelago
by the Dutch who initially planted coffee
trees around their stronghold of Batavia
but quickly expanded to Bogor and
Sukabumi regions in West Java in the
17th and 18th century. Indonesia proved
to have a nearly ideal climate for coffee
production; hence plantations were soon
established in other parts of Java and on
the islands of Sumatra and Sulawesi.
Today, Indonesia's coffee plantations
cover a total area of approximately 1.24
million hectares, 933 hectares of Robusta
plantations and 307 hectares of Arabica
plantations. More than 90 percent of
total plantations are cultivated by small-
scale growers.
Indonesia coffee export to the US grew by
37.9% in the period of 2014-2016,
reaching USD 25.48 million in 2016.
One successful story of a small-scale
grower is the KOPEPI Ketiara Cooperative.
Located in the Gayo Highlands of
Sumatra, the KOPEPI Ketiara Cooperative
cultivates coffee at elevations between
900 and 1700 meters above sea level.
The area's soil is suitable for the
production of Arabica coffee and these
plants have grown in the region since
1908 and are now recognized globally for
their rich flavor and strong body. The
cooperative uses the wet-hulled or semi-
washed processing method and applies
Good Agricultural Practices (GAP).
The Koperasi Pedagang Kopi Ketiara is a
women-run cooperative with over 890
grower-members who cultivate coffee on
more than 830 hectares of land. The
cooperative produces 100% shade-grown
Arabica coffee. Member farmers are
located around the Lut Tawar Lake in the
Gayo Highlands in the district of
Takengon and Bener Meriah, Central
Aceh. The area is a mountainous, tropical
forest within the Leuser Ecosystem.
The current chairwoman, Ibu Rahmah,
founded the cooperative in 2008 and has
also operated and managed her family's
coffee business for 20 years - purchasing
cherries, processing the green coffee and
selling to local traders. The commitment
of the coop's women managers to have
all members working together in support
of coffee production has enabled Ketiara
to expand and become a major player as
a coffee exporter to US, Europe, Japan,
Australia, and Asia
Photo: Chairwoman, Ibu Rahmah picking
Coffee with other women.
Indonesian Coffee Production & Export:
2008 2009 2010 2011 2012 2013 2014 2015 2016¹
Production (in tons)
698,016 682,690 686,921 633,991 748,109 740,000 711,513 550,000 650,000
Export (in tons)
491,335 518,122 440,241 353,698 520,275 460,000 382,774 350,000 400,000
Export (in bln USD)
1.08 0.88 0.86 1.09 1.53 n.a. 1.03 1.19 1.36
¹ indicates forecast
Source: Asosiasi Eksportir dan Industri Kopi Indonesia (AEKI)
8 Trade & Investment Bulletin| Number VI / May 2017
Number VI / May 2017 | Trade & Investment Bulletin 9
Number I | September 2016
VISITORS
PROFILE Chambers of Commerce in Midwest
Industrial and Trade Business owners in the
Midwest
Local and international community in Chicago
and in the Midwest
Potential Buyers and Investors
Local officers
Consular Corps in Chicago
±2.000 visitors (free for public)
EXHIBITORS
PROFILE Indonesian Ministry/Agency
Provincial Government
City Government
District Government
Entrepreneurs
Indonesian diasporas
Industries sector: Travel, Tourism, Arts, Textile,
Apparel, Fashion, Food and Beverage, Services
and other products.
PROGRAM 1. Exhibition of trade products, investment opportunities, arts, cultures and tourism destinations in Indonesia
2. One-on-one meeting
3. Workshop “Market Access to the Fishery and Maritime Sector of Indonesia – USA”
4. Business Meeting “Region Potency and market access to the USA”
5. Indonesian Art and Culture Performance
6. Cooking demo
7. Fashion show
8. Food and coffee/tea testing
9. Photos exhibition and Indonesian films promotion
“A VIBRANT INDONESIA” Highlight the modern and advance Indonesia
while keeping its richness of arts and cultures
10 Trade & Investment Bulletin| Number VI / May 2017
Source: International Coffee Organization
Gate to American and
European Markets
By: Lisa Yuliana, Vahd N. Mulachela
Global inquiries for organic products increase every year.
More and more people realize how important healthy foods are for their wellbeing. Making a commitment to healthy eating is a great start towards a healthier life.
But to guarantee the authenticity of organic products, certification becomes an imperative and inevitable requirement.
In Indonesia, efforts to ensure the genuineness of organic products are
conducted by professional certification agencies.
Like many other countries, Indonesia
experienced a significant expansion of the
domestic market for organic products.
This phenomenon occurred
simultaneously with the growing
awareness of the local public towards
healthy and ‘back to nature’ lifestyle.
Organic products available in the market
are getting more varied and diverse.
Cafes and restaurants selling organic
products are increasingly popular and
booming. People seem to understand the
benefit of consuming organic products.
Along with this trend, the need for
safeguarding the authenticity of organic
products becomes essential.
A high demand for organic products
requires a high and secure control
mechanism to protect consumers from
threats of counterfeit products that could
be harmful to health and the
environment. This necessity led to the
creation of a credible certification
mechanism compatible with regional and
international standards.
Number VI / May 2017 | Trade & Investment Bulletin 11
Number I | September 2016
To have a standardized certification gives
a set of benefits including wider access
for organic products into international
markets, a higher degree of consumer
protection, and broader access to
premium markets. Nowadays, through
participating in organic and sustainable
agriculture programs, producers could
gain multiple advantages.
Overview of Global Market As stated earlier, organic products saw
plausible demand increase not only in
Indonesia. The rise of queries for organic
products reflects the increase of their
sales in a global scale. In 2014, the sales
of organic products with estimated value
of USD80 billion were generated from
43.7 million hectares of organic
plantations throughout the world. Fifteen
years earlier, in 1999, organic market size
was valued around USD15.2 billion. The
combined area of an organic farm in the
world was approximately 11 million
hectares. In 2014, the countries with the
largest market for organic food were the
United States (27.1 billion Euros),
Germany (7.9 billion Euros) and France
(4.8 billion Euros). But the largest
distribution of retail sales by single
market was the United States (comprising
of approx. 43 percent of the global
market), followed by the European Union
(23.9 billion Euros/38 percent) and China
(3.7 billion Euros/6 percent). (Source:
Research Institute of Organic Agriculture
(FiBL-IFOAM survey 2016).
According to the FIBL’s 2016 survey,
Indonesia in 2014 ranked as the country
with the 8th highest increase of organic
agricultural area (47,950 hectares). That
surge contributed to Indonesia’s total
area of 88,247 hectares (0.16% of the
world total).
BIOCert Indonesia: Toward Global
Organic Product Market Indonesia has 19 organic products
certification agencies operating in the
country. While 8 of them are locally
based agencies, the rest are international
organizations specializing in certificating
organic products for export.
(Source: Indonesia Invites)
12 Trade & Investment Bulletin| Number VI / May 2017
Manado International
Conference on Tourism
Investment
Bring Tropical Indonesia Closer to the China and
East Asia Tourism Markets
Creating a sustainable platform for tourism
development
Manado International Conference on Tourism Investment is hosted by BKPM, Ministry of the Tourism of the Republic of Indonesia
together with Government of North Sulawesi Province, and will be opened by the President of Indonesia.
May 23 - 24, 2017
at Sintesa Peninsula Hotel, Manado, North Sulawesi –
Indonesia
Registration
www.manadoinvestmentforum.com
Phone: +62 21 525 2008
Fax: +62 21 520 2050
Trade Expo Indonesia Indonesia's largest Business to Business trade event showcasing the best of Indonesia
The largest archipelago in the world export products
For more info contact: Economics Affairs - Consulate General of the Republic of Indonesia in Chicago 211 W. Wacker Drive #8, Chicago, Illinois 60606 Phone: 312.920.1880 Fax: 312.920.1881 Email: [email protected] www.tradexpoindonesia.com
Trade & Investment Bulletin - monthly subscription at: https://goo.gl/o2bp5N