Jakarta - Relations between Indonesia and Italy are quite tight, especially after the visit of Italian President Sergio Mattarella in 2015. However, the cooperation between the two countries in the economic field is considered not maximal. Over the past year, the value of trade between the two countries reached US$2.5 billion. Data from the Indonesia Investment Coordinating Board (IICB) also noted last year that Italy's investment to Indonesia only reached US$26.7 million or ranked 29th in foreign investment. Even if in the first quarter of 2017, Italy ranked up to 25 with a value of US$11.34 million.
Former Italian Prime Minister, Enrico Letta, assesses Italian trade and investment cooperation in Indonesia is still very wide open. Letta, President of the Italy-ASEAN Association, was in Jakarta for ASEAN-Italy Economic Summit on 15-16 May 2017. In an interview to the online site Kumparan.com, Letta presented a number of investment opportunities and cooperation between Indonesia and Italy. He also revealed why Italian investment in the country is still small with a market share of only 0.1 percent. According to him, Indonesia is a promising country for investment with economic growth reaching 5.02 percent last year. And there are five sectors that become the target of Italian investment in Indonesia, namely aviation, infrastructure, energy, food processing, and pharmaceuticals.
President Joko Widodo's policies that boosted infrastructure development gave him positive signals to investors. Letta said he deeply admires the indonesian leader. "I really like Jokowi," Letta underlined. "He works hard for reform and the economy. I met him two years ago while visiting Italy. I want to say good luck, good luck to Jokowi. There are a lot of moments of domestic tension, conflict and so on. I advise Jokowi to remain tough, to remain long-term view, without being affected by a temporary conflict".
Regarding to where is interesting to invest in Indonesia, Letta answered: "Aviation, infrastructure, energy, food processing and pharmaceuticals. These sectors are important because they are long term. When we discuss energy, for example, investment in this energy is not just one or two years, it can be up to 20-25 years because of the many things that take time, such as drilling, exploration until the utilization of renewable energy. Most importantly, Italy is focused on long-term investments, because short-term investments are not sufficient enough to provide more jobs to society". "There are about 450 companies from Italy - he added - who have invested in Southeast Asia, and are ready to increase their investment in Indonesia. The sectors targeted are aviation, infrastructure, food processing, energy and pharmaceuticals. Indeed, Italian investment is still small, because the Italian government and companies do not know clearly how the opportunities in Indonesia, so we hold the ASEAN-Italy Economic Relations Summit in Jakarta". "The event aims to get Italian entrepreneurs to learn more about Indonesia and ASEAN. Why Indonesia and Asean, because if entrepreneurs come to Indonesia, at the same time also open the door to other Asean countries. This is our first meeting, and we hope to be back next year. This year, we hope to increase investment by at least 10 percent. The goal every year can grow".
Letta noted that Italy and Europe "strongly oppose the policy of protectionism by Donald Trump. Because we support the free market, we want to help Southeast Asia to develop the future of the free market together. This is our main goal and is a reflection of the EU. Through this event we want to convey a strong message about anti-protectionism".
As the trade cooperation with Indonesia, he added, "we wants more commodities, like coffee, we are very benefited by coffee from Indonesia and this will continue to be improved not only to Italy, also Europe. So also with fish. We certainly want to reduce the taxes and tariffs of Indonesian fish imports to Europe, in order to increase their exports". "ASEAN offers two important things, namely stability and growth, so it becomes an attraction for various companies, institutions and experts," Letta said. ASEAN is the 7th economic power in the world with growth between 4 percent - 5 percent. At this summit, Italy and Indonesia focus on discussing energy cooperation. According to Letta, Italy is interested to cooperate in the field of renewable energy ranging from geothermal, solar, and gas. "We know that energy is very important for Indonesia because the country is made up of islands and needs good connectivity," Letta said. In addition, Italy is also interested in cooperating in inf rastructure especially in the development of fast trains. He said, Italy has a qualified experience in building and developing fast trains. This is in accordance with the wishes of the Government of Indonesia, which is building a railway infrastructure in Java, Sumatra, and Kalimantan.
The ASEAN Economic Summit is expected to boost the growth of Italian investment in Indonesia by 10 percent per year. Based on data from the Indonesian Investment Coordinating Board (IICB) in 2016, Italian investment to Indonesia only reached US$26.7 million or ranked 29th foreign investment. In the first quarter of 2010, Italy ranked 25th out of 95 countries investing in Indonesia with an investment value of US$11.34 million with 58 projects. Meanwhile, the five largest countries that invest in Indonesia are Singapore, Japan, China, the United States, and South Korea. Managing Partner & CEO of The European House Ambrosetti Italy Valerio De Molli said the High Level Meeting opens opportunities for Italian businessmen to explore the potential for economic cooperation in Indonesia. According to him, the business network of Italian entrepreneurs with ASEAN countries, especially Indonesia is still minimal. Of the hundreds of Italian entrepreneurs who attended the meeting, as many a s two thirds of the first time to come to Indonesia. "It's not just conferences but also moments and processes where we want to bring business in Indonesia and ASEAN so they can share, explore, and eventually create investments," he said.
Source: Letta in Jakarta for Italy-Asean Summit, 'strategic market' to boost business
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