RI, NZ BOOST ECONOMIC TIES

By Andi Abdussalam

Jakarta, April 18 (ANTARA) - New Zealand Prime Minister John Key's visit to Indonesia this week fostered the commitment of both countries to increase cooperation in a number of economic sectors, such as animal husbandry, energy, manpower, and trade.          According to trade minister Gita Wirjawan, New Zealand is particularly interested in animal husbandry and geothermal energy.          "For investments, there are two sectors that New Zealand is interested in: animal husbandry and geothermal plants," he said during a seminar on business and investments, held by the Indonesian Chamber of Commerce and Industry (Kadin) and the New Zealand government here on Monday.          New Zealand's interest in animal husbandry and geothermal sector was also pointed out by Indonesian National Economic Committee (KEN) chairman Chairul Tanjung, who made the remarks after meeting with Key.         "We discussed today cooperation in several sectors, among others, animal husbandry, agriculture, energy, geothermal energy, education, and health," Chairul said.         Chairul said Indonesia was still lacking in goat and cow meat supplies.          "We hope this cooperation would continue at the investment level and technological guidance as well as guidance for Indonesian breeders. So, we hope cooperation would not be limited to importing meat only," he added.          Gita said New Zealand was a potential cattle producer.     "With regard to animal husbandry, New Zealand has 30 million head of cattle and 40 million sheep, while its population is only 4.5 million. So there is a lot of added value that they could give us," he said.          After all, New Zealand is willing to expand its milk business in Indonesia by investing in packaging. Fonterra, a milk producer from New Zealand, announced that it would build a processing and packaging plant in Indonesia to meet increasing demand.          "Indonesia's milk demand is predicted to grow by around 50 percent in the next eight years and, therefore, we wish to increase our processing and packaging capacity here to support our long-term business growth," the company's CEO, Theo Spierrings, said on the sidelines of Key's  visit.          "Global milk demand will increase by 100 billion litres in the next eight years and 60 percent of the growth demand will come from China, India, and Indonesia. Investment in local packaging and processing capacity will help ensure the fulfilment of fast-increasing milk demand in the region," Spierrings said.          Every year Fonterra produces two million tonnes of milk and its derivative products and 80 percent of the products have been processed and packaged in various countries.          Indonesia is Fonterra's tenth largest market in Asia and the Middle East, constituting about 28 percent of the company's export market.         With regard to the energy sector, Chairul said Indonesia hoped to increase the utilization of geothermal energy in the country.     "Indonesia has geothermal potential. But New Zealand has made the most of its geothermal potential. So, we hope we can have its assistance in the form of investment and technology transfer," Chairul noted.          According to Gita, New Zealand is interested in cooperating with Indonesia in the energy sector.          "New Zealand is also interested in geothermal development projects because that country is, like Indonesia, located in the ring of fire. So, they are interested in Indonesia, which has 40 percent of the world's geothermal total reserves," Gita said.          Cooperation between the two countries in geothermal projects began in 1982, when New Zealand's then prime minister, Robert Muldoon, and president Soeharto started the first geothermal project in the country in Kamojang.           In the meantime, both countries have also signed a memorandum of understanding (MoU) on manpower cooperation. New Zealand is in need of an Indonesia-trained workforce in the animal husbandry sector, President Susilo Bambang Yudhoyono said after a meeting with Key.            He called on all parties involved in labour issues in Indonesia to seize the opportunities of work in New Zealand, following the improvement of economic cooperation between the two countries.           "An MoU on manpower has been signed to improve cooperation between Indonesia and New Zealand and we hope it will bring real benefits to both parties," President Yudhoyono said.           With regard to trade between the two countries, Gita said it was still very small, at only US$1.1 billion.          "The government is making efforts to see that trade between the two countries reaches minimally one percent of the two countries' total gross domestic product. The two countries' GDPs total US$1.2 trillion and so one percent of that is US$12 billion. As it is now still recorded at US$1.1 billion, it means a lot of work still has to be done," Gita said.            Indonesia¿s export products to New Zealand include textile, garments, and agricultural and animal husbandry materials.            "Indonesia, meanwhile, imports a lot of processed milk, which is their [New Zealand¿s] main export. We now still suffer a deficit of between US$100 million and US$200 million in our trade with New Zealand, but hope with the ratification of the ASEAN-New Zealand Free Trade Agreement early this year that conditions would become more equal," he said.            New Zealand's exports to Indonesia reached NZ$ 870 million, and imports from Indonesia total NZ$ 704 million.            Total bilateral trade between the two countries has reached NZ$ 1.5 billion.            New Zealand's main exports to Indonesia in 2011 were food and drink ¿ including milk, cream milk, cheese, and butter ¿ amounting to 60.9 percent of its total exports worth NZ$ 521.3 million.***2***(T.A014/INE/b003/B003) april 18, 2012