story and photos by Kim Souza
ksouza@thecitywire.com
Dr. Dino Patti Djalal, the Ambassador of the Republic of Indonesia, wowed a room of business men and women in Rogers on Monday, (April 15) with the opportunities of trade. He was selling the benefits that come as trading partners with one of the most rapidly growing economies in the world.
Djalal’s trip to Northwest Arkansas lasted less than 24 hours, but was packed full of meetings starting with U.S. Sen. John Boozman, R-Ark., on Sunday evening. He then addressed business students at the University of Arkansas on Monday morning before speaking to a group of invited guests at Arkansas World Trade Center at noon.
Djalal told The City Wire he was looking forward to a brief meeting at the Wal-Mart Corporate office in Bentonville early Monday afternoon on his way back to the airport. This trip was cut short as he was asked to address the U.S. Congress on Tuesday about potential trade opportunities.
“It took the University of Arkansas two years to get the Dalai Lama to visit, and I got Ambassador Djalal to commit in just one year, 50% of the time. Even though this trip is brief he promises to return,” said Boon Tan, director of Asian Trade Development for the Arkansas World Trade Center.
Djalal said he didn’t have time to see the Crystal Bridges Museum of American Art in Bentonville, but it does give him a great excuse to return. Djalal joked that Arkansas seems like a very nice place to live, “unless you are chicken or a duck.”
TENSE TRADE HISTORY
Djalal said for too long the trade and sporadic conversations between the U.S. and Indonesia have been “crisis driven” to the point where it almost took a catastrophe or some human rights issue to glean American interest.
“We think there are new opportunities for a more balanced and ongoing dialog going forward. We do hope to double trade with the United States in the next few years, but China has been very aggressively pursuing Indonesia as well,” he said.
Indonesia’s economy is growing at a 6% clip, just slightly behind China’s 7.5%. The nation has one of the fastest growing middle class demographics in the world at 20% of the population, some 50 million consumers,with a disposable monthly income of $3,000. Djalal says the number is growing at 7 million per year is on track to reach 135 million by 2025.
There is tension between the the nations regarding a compliant recently filed with the WTO involving horticulture and beef imports from the U.S. In several news reports Indonesia has been criticized for a lack of transparency and “protectionist” tendencies as result of recent trade and investment regulations, such as import licensing requirements, trading rights limitations, foreign equity restrictions and domestic manufacturing requirements.
Djalal assured The City Wire, that Indonesia is listening to the concerns brought by the U.S. and says work is ongoing to resolve the complaint. On Friday, Indonesia vowed to scrap import quantity limits on horticultural products in response to the U.S. complaint.
“We have pledged to double trade with the U.S. and we don’t take these complaints personally, but more see them as a part of normal trade discussions,” Djalal told The City Wire.
POLITICAL STABILITY
He said the country has come a long way in terms of political stability in the past decade after years of unrest immediately following the countries move to democracy.
“Our president is just finishing his second five -year term and today we are a model for an Islamic democracy for the rest of the world,” he said.
Indonesia’s goal to attain self sufficiency in food agriculture is not necessarily a roadblock for Arkansas companies, according to former Arkansas Gov. Jim Guy Tucker, who attended Monday’s meeting.
“There is no reason you can’t set up an importing company here in Arkansas and then sell those Indonesian goods around the country and world for that matter. On the flip side, Indonesia needs a lot of our skills to develop their own products. That leads to lots of consulting opportunities and those relationships build sales and investment over time,” Tucker said.
He first began investing in Indonesia in 1991 and says those investments have been profitable and the experience in the country has been very good. Tucker is founder of Pacific GeneTech Limited. a firm that develops and commercializes vaccine technologies to address threats of emerging infectious diseases and other pathogens.
Ni Made Marthini, commercial liaison for the Embassy, addressed the group about the possibilities to attend an Indonesian Trade Expo this October. Tan said he will likely take a delegation to the expo in October in hopes of facilitating some working relationships for a few local companies and partners abroad.
“When we returned from the Thailand delegations, three local companies had found trade partners abroad. We hope to do the same in Indonesia,” Tan said.
Chris Pixley, vice president of operations for Fayettville-based Pacific Vet Group, said he is interested in Southeast Asia because he sees plenty of opportunity to sell his probiotic technology, which is used to promote better health in live poultry without the use of antibiotics. He plans to use the contacts he made today at the noon luncheon to assist with licensing issues and other protocol.
Marthini urged the business group to seek her out for help
TRADE BALANCE
U.S. exports to Indonesia in 2012 totaled $8 billion, up 8.1% from the previous year. Corresponding U.S. imports from Indonesia were $18 billion, down 5.8%.
Djalal agreed the countries need to work toward balancing the $10 billion trade deficit. He would like to see Ford and Cadillac on Indonesian streets and told the group his country does import lots of television entertainment.
“I personally would like to see more Oprah and less Kim Kardashian,” he said with laugh.
Tan said the Ambassador’s viewpoint is “refreshing” and the possibilities are huge going forward.
“You know U.S. companies shied away from Indonesia for nearly three decades because of environmental concerns. But today they are meeting with Greenpeace and struck an agreement to right those wrongs. We have to give them a chance to amend,” Tan said.
The business leaders agreed Indonesia’s rapid growth and willingness to trade and bring new products to market is too big for U.S. to ignore. A representative from Wal-Mart assured Djalal at the meeting that the retailer is committed to sourcing from sustainable companies and countries who enforce high standards.
Tan said the rapid rise of the Chinese Renmimbi is causing foreign manufacturing investment in China to flee to areas like Vietnam and Indonesia with cheaper labor and more favorable exchange rates.
He expects Indonesia’s growth to continue and says Arkansas the United States need to be onboard. But it all begins with conversations like those heard here today.