EU commits €10 million to help Indonesia grow trade
EU commits €10 million to help Indonesia grow trade
Jakarta, 21 August 2018 – Indonesia and the European Union (EU) today took a significant step to help spur growth in trade and investment by signing a EUR 10 million Financing Agreement for ARISE Plus Indonesia, a new, major, five-year programme that aims to improve Indonesia's export competitiveness and integration in global value chains.
Indonesia, the world’s fourth most-populous country, has great potential for growth as a trading partner. Although the biggest member of ASEAN by far, Indonesia represented only 11.2% of the EU's overall trade with the 10-country bloc, according to 2017 ASEAN statistics. Similarly, Indonesia received only 1.6% of all EU FDI going into Asia, and only 6% of all EU investments flowing into ASEAN. Indonesia thus lags behind Singapore, Vietnam, Malaysia and Thailand.
The ARISE Plus Indonesia programme, which runs from 2018 to 2023, prioritizes improvements in four areas:
(1) Trade and Investment Policy,
(2) Trade Facilitation,
(3) Export Quality Infrastructure, and
(4) Geographical Indications (GI) and SME support.
The programme will focus on four product categories with great export potential: agri-food, fish, wood-based products and cosmetics.
Mr Luky Alfirman, Director General of Budget Financing and Risk Management of the Ministry of Finance, signed the agreement at a ceremony today at the ministry on behalf of the Indonesian Government. It was witnessed by the EU Ambassador to Indonesia, H.E. Vincent Guérend, as well as representatives of the programme's beneficiary ministries and agencies.
Noting the ongoing negotiations for a Comprehensive Economic Partnership Agreement (CEPA) between the EU and Indonesia, Ambassador Guérend said: "ARISE Plus Indonesia offers a flexible approach to facilitate rapid response to issues emerging from the negotiations and the initial phase of implementation of the agreement. The programme will provide capacity-building to relevant ministries and agencies relevant for the negotiations, knowledge-sharing activities as well as dissemination and communication of CEPA results at national and sub-national levels".
The programme builds on past successful EU-Indonesia trade-related assistance programmes. It will also engage with civil society in trade and investment, particularly private-sector representatives, on issues related to the CEPA. In addition, sectoral business associations, farmers' and small producers' associations will benefit from activities related to Export Quality Infrastructure and GI capacity strengthening.
ARISE Plus Indonesia is part of the "ARISE Plus family" in Southeast Asia, which includes similar programmes in Cambodia, Thailand, Malaysia, Myanmar, Viet Nam and Lao PDR. While these country-level programmes focus on supporting national priorities, they are closely linked to the ARISE Plus regional programme (EUR 41 million, 2017-2021) that supports the regional economic integration and trade agenda of ASEAN. In this regard, ARISE Plus Indonesia will support SMEs to participate in Global Value Chains and will align the national rapid alert system for food and feed products with ASEAN's rapid alert system more closely.
ARISE Plus Indonesia complements the large portfolio of EU support to civil society in Indonesia and other ongoing programmes with the Government of Indonesia. The EU is also is a key development partner of ASEAN, with Indonesia benefiting from many EU-ASEAN programmes as well.
The Government of Indonesia underlines the importance of continued economic cooperation with the EU that shall contribute to Indonesia's enhanced capacity and to unlock its potential to benefit more from the international trade agreements and regional economic integration.
The lead ministry for ARISE Plus Indonesia is the Ministry of National Development Planning (BAPPENAS). Other beneficiaries include the Ministry of Trade, the Ministry of Industry, the Ministry of Marine Affairs and Fisheries, the Ministry of Agriculture, the Agency for Food and Drug Administration (BPOM), the National Standardization Agency (BSN), the Ministry of Law and Human Rights, the Ministry of Foreign Affairs, and the Coordinating Ministry for Economic Affairs.