Trade with Indonesia expected to be strong in H2

KUALA LUMPUR: Malaysia-Indonesia bilateral trade is expected to be
strong in the second half of 2012 as Indonesia's gross domestic product
(GDP) growth will be robust at 6%, driven by domestic demand.
Malaysia External Trade Development Corporation (Matrade) chief executive officer Dr Wong Lai Sum said at a media briefing following her keynote speech at the Federation of Malaysian Manufacturers' conference on Indonesia - Market Outlook & Strategies, that demand continued to expand on a month-on-month basis in Indonesia.
She
said the republic's population of 240 million would continue to support
internal growth, with GDP hitting the growth target of 6% despite
slowdown in exports to China and Europe.
“Data released by
various agencies indicate robust growth for several sectors in
Indonesia including construction, infrastructure development,
information, communication and technology, both software and hardware,
telecommunication, transportation, renewable energy, education and
professional services training and franchise,” Wong said.
Bilateral
trade between Malaysia and Indonesia increased 15% in 2010 to RM55.9bil
in 2011. Indonesia was also Malaysia's sixth largest trading partner
last year, accounting for 4.4% ofa the total trade.
Wong said
companies have to do their due diligence when seeking business
partners, adding that they should adapt to the market to compete
effectively.
Wong said both countries could cross invest in the
forms of joint venture or collaboration but also cautioned investors to
unravel into the rules and regulations there.
Meanwhile, KRA Group chief executive officer Karim Raslan
said entrepreneurs could consider to invest in cities like Surabaya,
Palembang, Semarang, Bandung and Balikpapan, based on the nature of
their businesses and also their preference for the environment, besides
Jakarta.
Some of the advantages Malaysians have for investing in
Indonesia include its geographical proximity, similarity in language
and lower labour cost, he said.
“The unemployment rate in Indonesia as at 2012 is 6.3%, suggesting that manpower in Indonesia is under utilised,” said Karim.
On
the flipside, there were challenges like lack of infrastructure
including connectivity of roads across the country, natural disaster,
corruption and bureaucratic inefficiencies, he added. He also advised
entrepreneurs to persevere and put in effort in building relationships
with the locals there.
and not giving up easily in order to tap into the market.
At
the sideline, commenting on the 2013 budget, Wong said the Government
was serious about the business environment here and the coming budget
would support its growth.