Indonesian food offers a ray of hope in Asia

Business Asia, Sept 13, 1999

Indonesia holds some of the most promising agribusiness opportunities in the region, according to a Jakarta-based trade commissioner.

Austrade's Tony Burchill, who was in Australia last month drumming up support for the "Indonesia Food and Agribusiness Initiative 1999" trade conference, said Indonesia's agribusiness sector had fared well during the crisis.

Although Indonesia has been the worst-hit of the region's crisis economies, Burchill said agribusiness offered some of the best prospects in the country. The sector actually prospered during the economic recession in both its share of gross national product -- up from 18 to 20 per cent -- and in exports over the past 18 months.

"Now is the time to really study the market and to understand that there are finally some returns on investment which are almost guaranteed given a stable political position," he said.

"If exporters haven't taken some sort of position in their own minds about the market, then they'll miss out."

Burchill said the crisis in Indonesia was a multi-varied equation depending on the sector involved, geography and timing.

He said some sectors, such as raw cotton, had seen increased sales in Indonesia, while certain regions within the country had not suffered from the regional crisis.

As for timing, Burchill said some industries had bounced back stronger and faster than others: notably beef cattle.

"It depends on several factors, but agribusiness is the right industry for us to publicise because it is proving to be one of the most resilient industries in Indonesia," he said.

"Indonesia badly needs our technical services and our products -- what we need from Indonesia is its huge market and their export focus into other parts of Asia."

The agribusiness sector has also been boosted by a bumper crop for the past year and an increased focus by the Habibie Government on making the sector more competitive, Burchill said.

"After the May 1998 riots and the resignation of President Suharto, the main thing the Habibie Government focused on was food security," he said.

"This was for the very simple reason that people were already discontent about the political situation so they (the government) wanted to make sure the people still had food in their bellies.

"What they did to ensure food security was throw open the laws to free market forces. They dropped tariffs and removed the influence of the First Family in many areas."

Burchill said the main areas to target were commodity goods, grains, animal feeds, seed technology, horticulture, sugar, dairy and aquaculture.

He said Australian companies not already in the region still had time to take advantage of the improving situation in agribusiness.

Representatives of more than 100 Indonesian companies are expected to take part in the "Indonesia Food and Agribusiness Initiative 1999", which starts on October 4 in Jakarta.

After a three-day business forum and a two-day joint working group session, the representatives will move on to Lampung in South Sumatra, Lembang and Surabaya in Java, and Denpasar in Bali.