ASEAN KEY DESTINATIONS
Indonesia to focus on digital economy, services
The government aims to boost cooperation for the digital economy and services sectors within the framework of the ongoing Indonesia-Australia comprehensive economic partnership agreement (IA-CEPA).
“Following the development and trends in the 21st century, we’re focusing on shifting the IA-CEPA to the services and digital economy sectors,” said Trade Minister Thomas Lembong during his visit to Canberra last week. Indonesia is currently on the drive to boost its e-commerce transactions worth US$130 billion by 2020, more than tenfold from $12 billion at the end of 2014.
Apart from digital services, other sectors that have been targeted for deeper cooperation were nursing, culinary, fashion and jewelry design, Thomas added.
“Indonesia will partner in vocational training and capacity building with Australia. In the near future, internship opportunities in Australia will be more open,” he said in a statement.
Mahmud Syaltout, an international trade law and policy expert at the University of Indonesia, lauded the government’s move and argued that Indonesia should also use the partnership for a more integrated supply chain, such as those in the cattle industry.
“Indonesia could, for example, become not only a cattle market to Australia, but also a supplier of cattle derivative products with help from Australia,” he said.
Separately, the Investment Coordinating Board (BKPM) announced that it had received an investment commitment in the meat processing industry from an Australian firm.
“Besides export-oriented meat processing, the company also has other products like leather processing, biodiesel, collagen and cans […],” he said in a statement, adding that the company could export 700 containers of frozen meat worldwide in a week.
Indonesia and Australia, as neighboring countries, initially started negotiation on the IA-CEPA in September 2012, but the progress has been slow. The partnership is set to cover economic cooperation, merchandise trade, trade in services, investment, movement of natural persons, institutional and framework provisions and other issues like e-commerce and competition policy.
Both governments are now committed to resume the talks, in which Thomas said previously that the IA-CEPA would be one of the bilateral agreements targeted for serious discussion this year.
Trade and economic relations between the two countries are still underdeveloped, with bilateral trade dropping on average by 4.25 percent during the period of 2010-2015 to a level of $8.5 billion. Australia was the twelfth largest foreign direct investor in Indonesia in 2015, hitting $167 million.
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