By Andi Abdussalam
Jakarta, June 23 (ANTARA) - After five days of marathon meetings, delegations from Indonesia and Japan succeeded in Tokyo on Friday night to sign the final draft of an Indonesia-Japan Economic Partnership Agreement (EPA) designed to promote economic cooperation between the two countries.
The document will be brought to Jakarta in mid-August for signing by the heads of government of the two countries, namely Prime Minister Shinzo Abe and President Sosilo Bambang Yudhoyono.
Indonesia and Japan have tried their best to finalize the EPA draft which is expected to facilitate and promote economic cooperation, and increase Japanese investment which has been declining over the past ten years in Indonesia.
The Indonesian delegation in the negotiations held at the Japanese foreign ministry building in Tokyo, was headed by Soemadi Brotodiningrat, while the Japanese delegation included Japanese deputy foreign minister for economic affairs Masaharu Kohno.
"With the completion of the final negotiations on the draft of the Economic Partnership Agreement (EPA), direct investment from Japan will hopefully flow again to Indonesia in a significant amount," Soemadi Brotodiningrat said.
Rachmat Gobel, a member of the Indonesian delegation who is also vice chairman of the Indonesian Chamber of Commerce and Industry (Kadin) hoped that the Indonesia-Japan Economic Partnership Agreement would create balanced and mutually beneficial economic relations.
"Indonesia needs capital and technology from Japan. We can also ask them to increase their investment and training for the country's human resources in the framework of technology transfer," he said.
Japan's investment which was leading in Indonesia in the past has been declining in recent years. With the EPA, Indonesia hopes the trend will be reversed.
"In the past ten years Japanese investment in Indonesia has continued to decline," Rachmat Gobel said.
He said that Indonesia and Japan would celebrate the 50th anniversary of their diplomatic ties next year, hoping that it would serve as a good momentum to refresh their ties.
In the past ten years Japanese investment in the country had continued to drop because Indonesia's investment climate was uncompetitive compared to that of other countries, particularly those in the Southeast Asian region.
"Kadin hopes next year's 50th anniversary of Indonesia-Japan relations will be a momentum for increasing cooperation between the two countries in the social, cultural and economic - particularly investment - fields," Rachmat Gobel said adding the EPA should serve as an anniversary gift.
Indonesia and Japan actually have complementary economic relations which, if developed maximally, could benefit both countries.
"Japan has technology and much capital while Indonesia has a lot of natural resources and a large market. If the two potentials are synergized they could become strong capital for increasing balanced and mutually beneficial cooperation," he said.
With the EPA, Indonesia sets a target to lure a flow of Japanese investment at 140 to 160 billion US dollar or two folds in amount since the past fifty years.
Masaharu Kohno on a different occasion said that Indonesia is very important to Japan, and the economic cooperation between the two countries needs to be maintained and expanded.
It was admitted however that Japanese businesses were still harboring doubts about the prospects of investing in Indonesia although they often say Indonesia remains a prospective country for investment.
"Japan is still harboring doubts and is waiting for the promulgation of the new Investment Law and wants to know how it is implemented in the field. They are also closely monitoring developments in taxation and labor affairs in Indonesia," Halida Mujani, special advisor for international cooperation at Indonesia's Trade Ministry, said.
But Brotodiningrat was convinced that the EPA could facilitate both sides to eliminate Japanese businesses doubts. As to the opinion that Japan is at present seen as having no sense of speed in implementing its economic reform policies, this senior diplomat said EPA would push Indonesia to be more serious in making it better in the future. "At least EPA is able to deflect Japan's doubts," Brotodiningrat said.
To this end, one of the important things Indonesia will have to do is to improve Japan's business confidence (in Indonesia), Halida Mujani said meanwhile.
"Indonesia is expected to launch more active business promotions in Japan in order to increase the confidence of Japanese businesses. This will also serve as an important indicator in assessing the success of the EPA," Halida said.
She said the problem on the Indonesian side now was to what extent it had prepared itself to be able to seize the opportunities arising from the opening of the Japanese market to Indonesian goods under the EPA.
According to Halida, Japanese businesses were still harboring doubts about the prospects of investing in Indonesia although they often say Indonesia remains a prospective country for investment.
She said Indonesia's weaknesses lay in the supply of goods. "We have to work hard to increase our production and supply capabilities," she said.
The same opinion was expressed by Asianto Sinambela, director of trade, industry and investment at Indonesia's Foreign Ministry, who said the EPA should encourage Indonesia to be more aggressive in seizing the market opportunities the agreement would open.
He said Indonesia was facing new challenge from Japan. "The problem will lie in our ability to utilize the opportunities. The EPA will encourage bigger exports to Japan," he said.
Indonesia's agricultural, plantation, fishery and manufacturing products must meet international standards to enter the Japanese market, he said.
(A014/A/HAJM/b005) 2. 19:40/20:45 (T.A014/A/A014/B005) 23-06-2007 20:46:17
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