INDONESIA is ready to strengthen economic ties with Zimbabwe, that country’s deputy minister of foreign affairs, Abdurrachman Fachir, told the Financial Gazette’s Companies & Markets last week.
Fachir arrived in the country last week, leading a delegation of Indonesian investors who came for meetings with the Zimbabwe National Chamber of Commerce (ZNCC), where various investment and trade opportunities were discussed.
“We are here to explore better and brighter co-operation between Zimbabwe and Indonesia,” said Fachir.
“There are some Indonesian products here and we also import local products such as cotton and tobacco, even some food products but I think we need sustainable supply and direct commercial cooperation; it is important,” Fachir.
Indonesia and Zimbabwe already have significant economic ties, with the Asian country already importing cotton and other products from the southern African country.
The largest economy in south east Asia also imports huge quantities of tobacco from Zimbabwe.
There is also a significant presence of Indonesian products in Zimbabwe, whose reliance on imported goods increased following the near collapse of the manufacturing industry.
Zimbabwe would have to explore more options for exports to Indonesia, as cotton output has declined dramatically after international prices plunged, forcing farmers to concentrate on tobacco production.
Fachir said Indonesia takes the issue of economic ties between the two countries seriously, and it was part of the reason that his government had to dispatch him to Harare.
“We believe that we can really explore our potential if we can do direct business. But it depends on Zimbabwe. It’s about certainty; it’s about assurance, the avoidance of double taxation and the protection of investments. That’s what attracts business people to do business in a foreign country. If we do direct (trade), it must be easier and cheaper if we come to an agreement and sign an (Memorandum of Understanding) MoU,” he said.
The Indonesian official did not specifically mention the hurdles being encountered by foreign investors in Zimbabwe.
But there has been uneasiness over controversial empowerment laws being pursued in Zimbabwe.
The empowerment policies force foreign investors to surrender at least 49 percent shareholding in local firms to indigenous Zimbabweans.
Fachir said he has invited the ZNCC to Indonesia later this year.
“I have invited ZNCC to come to Indonesia in October this year for the trading expo. In the meantime, I will share our discussion with the Indonesian Chamber of Commerce. Maybe by October we will be able to witness the signing of an MoU between the two countries,” he said.
ZNCC president, Davison Norupiri, said; “As a chamber, we are more than happy to do business with Indonesia.
“We will arrange a business delegation to go to Indonesia during the expo time. My desire is to see an MoU between the two chambers. We will also engage our central bank, our minister (of Industry and Commerce). So as business, we are prepared to do direct engagements with Indonesia.”
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