Jakarta,(ANTARA News) – Monday`s meeting between President Sosilo Bambang Yudhoyono and Myanmar Prime Minister Thein Sein resulted in agreements holding out bright prospects for the two countries` trade relations.
The two leaders agreed to increase their trade volume to more than US$300 million from the current US$269,6 million in addition to conducting direct trade and building direct banking links often seen as barriers in the two countries` trade relations.
As the first step to meet this commitment, businessmen from Myanmar and Indonesia are coordinating to hold a trade fair in July this year to boost bilateral trade.
To be sponsored by the Union of Myanmar Federation of Chambers of Commerce and Industry and the Chamber of Commerce Industry of Indonesia, the Myanmar-Indonesia trade fair will comprise over 60 booths from the two countries, the 7-Day News said on its website on Tuesday.
On display at the Myanmar booths will be agricultural produces, while that at the Indonesian`s will be metals, electrical goods, medicines, and textile, the sources said.
Indonesia, which mainly imports from Myanmar red onion and beans and pulses, is Myanmar`s fourth largest trading partner among members of the Association of Southeast Asian Nations after Thailand, Singapore and Malaysia, having a bilateral trade with Myanmar standing at 293.96 million U.S. dollars in the fiscal year of 2007-08.
Indonesia`s exports to Myanmar amounted to 207.24 million dollars, while its imports from Myanmar valued at 86.72 million dollars, Myanmar official statistics show.
In 2006, Indonesia established its first direct sea trade route with Myanmar operating between Jakarta and Yangon, broadening its network in the Southeast Asian region, according to earlier local reports.
In the meantime, Indonesian deputy ambassador to Myanmar Gopokson Situmorang said on Monday said that Indonesia and Myanmar agreed to develop direct trade to promote economic cooperation between the two countries.
He said his office had approached Myanmar`s central bank and airline to explore the possibility of establishing a direct banking links and flights between Indonesia and Myanmar.
“We are exploring a direct banking and direct transport between Indonesia and Myanmar,” he said after attending a meeting between the Indonesian Chamber of Commerce and Industry (Kadin) and a visiting Myanmarese delegation.
So far trade between the two countries is carried out through Singapore.
“Shipping of goods is also done through Singapore while if it is done directly, for example, from Sabang (Aceh), the route will be closer and the cost will also be less,” he said.
He said he hoped the Myanmar central bank could connect Indonesian banks with Myanmar Economic Bank (MEB), Myanmar Foreign Trade Bank (MFTB) and Myanmar Investment and Commercial Bank (MICB) to serve import and export transactions.
His side was reported to be in process of exploring it. If it could be done directly no commission would have to be paid. Under the current system our goods become more expensive, he said.
Kadin`s committee chairman for Cambodia, Laos, Myanmar and Vietnam, Juan Gondokusumo, meanwhile said that the main obstacle hindering the development of trade relations with Myanmar was the use of indirect system of payment for the trade.
“They do not use US dollars and so it poses a problem in transactions. To open a letter of credit a third party namely Singapore is also needed,” he said.
The government was urged to immediately seek a way to facilitate trade and economic relations between the two countries.
Kadin and Myanmar`s Chamber of Commerce and Industry are currently preparing a draft memorandum of understanding to improve the relations between the two countries in the field of economy.
“We are going to jointly make a memorandum of understanding on everything we are going to improve,” he said.
Myo Oo, deputy to the director general of Myanmar`s trade department, admited that banking still posed a problem hindering the development of trade relations between the two countries.
“Because of US sanctions we cannot conduct transactions in US dollars and so we use Euro or other currencies such as Singapore Dollar. We wish to try to trade in Euro like what we have done with other countries,” he said.
He said that Indonesia remained one of his country`s 10 biggest trade partners after Thailand, India, China, Japan, Singapore, South Korea and Malaysia.
In view of that his side had agreed to cooperate with Indonesia to promote growth of trade between the two countries. “However we are now still seeking the right sector for development. (We are still considering) whether it is agriculture or if Indonesia would still import rice,” Myo Oo said.
He said Indonesia had so far imported green peas and onions from Myanmar through Malaysia.
Oo hoped exports and imports between the two countries could later be carried out directly.
“Myanmar`s main exports to Indonesia are green peas totaling around 20,000 tons a year. Now we also wish to include onions and therefore we wish to conduct direct relations with our buyers in Indonesia,” he said.
The total value of trade between the two countries in 2007 was recorded at
US$292.8 million, increasing 86 percent from 2006 totalling US$157.4 million. From January to November 2008 the value of trade between the two countries reached US$269.6 million.
Indonesia has so far enjoyed a surplus in its trade with Myanmar.
Indonesia`s exports to Myanmar in 2007 reached US$262.4 million while its imports from that country were recorded at US$30.4 million.
Indonesia exports among others oil and gas, palmoil, cigarettes, sarongs and herbal medicines to Myanmar while it imports among other things, peas, onions, beans and fishery products from that country.