As an emerging economy with vast natural resources and fast-growing domestic market, it’s only natural that Indonesia catches the eyes of foreign investors. Among those eyeing the potential is Italy, whose economy relies on a host of small and medium-sized enterprises.
To find out just what Italian investors make of the business climate in Jakarta and how they plan to seize the opportunity, NOW! Jakarta sat down with Alessandro Liberatori, the Director of the Italian Trade Agency in Jakarta, acting also as Trade Promotion Office of the Italian Embassy. Prior to his appointment in Jakarta in November 2015, Liberatori was posted at the ITA Headquarters in Rome and served as the Director of ITA in Croatia.
Please tell us about the principal function and role of the Italian Trade Agency (ITA).
ITA is a governmental agency supervised by the Italian Ministry of Economic Development. It aims to promote Italian business in foreign countries and assist them to penetrate and establish economic relations with foreign companies in the host countries. We also help local companies here that want to build cooperation with Italian business counterparts, to attract Indonesian investment to Italy and to promote Italian investment to Indonesia. As an institution under the Ministry, our tasks are very diverse, from organizing promotional activities at international fairs, seminars, workshops and conferences, to providing assistance and consultating to Italian companies in Indonesia.
How do you see the Indonesia-Italy business climate today?
I think in general, Indonesian economy signifies a promising future, and bilateral relations between Indonesia and Italy are showing positive developments from year to year. In fact, ITA is established in 65 countries around the world, and Jakarta office is considered as one of the most important branches as we see many business opportunities in Indonesia. The government here also works hard to improve investment regulations in order to attract more investors from Italy to Indonesia. So the relations between the two countries have become stronger and we’ll look forward to more collaboration in the near future.
What are the main areas of trade between the countries?
Manufacturing and machinery are the largest Italian industries operating in Indonesia but most Italian companies are infact medium enterprises. We understand that Indonesia has many important projects nowadays like toll road development, ports, railways, airports, waste management, infrastructure improvement and so on; thus we hope more Italian companies can take part in these projects. We’re also keen to explore many regions outside Java, like Sumatra, Kalimantan and Sulawesi, as we believe these regions are very interesting and have investment opportunities.
What about food and beverage industry?
Italian food and restaurants are very famous and well accepted here in Indonesia, but actually it is not easy to import Italian food products to Indonesia due to complicated customs procedures. To address this issue, Italy together with other European countries is working on an arrangement called Indonesia-European Union Comprehensive Economic Partnership Agreement (CEPA), to facilitate trade and investments and cover a broad range of issues, including customs duties and other barriers to trade, services and investment, access to public procurement market, as well as competition rules and protection of intellectual property rights. The negotiations are just starting this month in Brussels and hopefully the agreement can result in better and easier procedures so we can expand our cooperation with Indonesia.
Are there any challenges faced by Italian companies in Indonesia and what areas do you think need improvement?
Of course there are a few challenges like geographical distance, language differences or cultural barriers, but I don’t think we have many serious problems here. One of our main focuses today is to increase visibility of Italy to all Indonesians and vice versa. I think Indonesia and Italy complement each other with their strength; Indonesia is very rich with abundant natural resources like oil, coal, energy, palm oil and many more while Italy excels in technology and machinery which can help Indonesia create better quality products, hence the partnership benefits both countries. However, given the fact that there are many changes in business regulations, I think it is important for the government to set certain regulations. For investors, certainty is very crucial because they need to make financial plans before investing in a foreign country, therefore reliable regulation is needed to maintain Indonesia’s position as the most favourite investment destination in Asia.
Italian Trade Commission
Gedung BRI II
Jalan Jendral Sudirman Kav. 44-46
Jakarta 10210
T: +62 21 571 3560
www.ice.it/en/markets/indonesia/jakarta
