In tandem with rising petroleum and natural gas prices, Indonesia has, since 2002, been on a growth curve and has become a new country of opportunity by rapidly improving economic conditions. Our trade volume with Indonesia, which ranks 6th among countries in the Far East that Turkey trades with, surpassed 1.5 billion dollars in 2007.

Sumatra

Indonesia, is the second largest producer of rubber in the world, fourth in coffee production and second in palm oil production after Malaysia. Although Indonesia seems to fit the profile of an agricultural society, manufacturing accounts for a significant share of its growth in recent years. With a population of 242 million, Indonesia is described as one of the important markets of the future with significant opportunities for Turkish companies in energy equipment, construction materials and food stuffs.

When global trends are taken into consideration, it is predicted that countries from the Southeast Asia – Pacific region will rank second in world trade by 2050, accounting for approximately 50% of total world trade. As a result, the Office of the Undersecretary of Foreign Trade (DTM) developed a plan in 2005 to draw attention to this region. The “Asia-Pacific Strategy” implemented by DTM aims to increase exports to the region to 8 billion dollars by the end of the first 5 years. Indonesia is one of the most prominent countries in this region which will experience significant economic growth in the next few years because its extensive petroleum and natural gas resources, cheap labor, a population of 242 million and its location on international marine transportation routes have made Indonesia one of the most attractive countries in the international arena. Located between Southeast Asia and Australia and consisting of approximately 13,000 islands, Indonesia has demonstrated excellent growth performance among today’s developing countries. Indonesia currently ranks sixth among countries we trade with in the Far East and our trade volume is constantly increasing. We closed out 2007 with exports of 1.5 billion dollars. When we consider the significant potential in sectors, such as energy equipment, construction materials and foodstuffs, it is likely that exports in the next few years will far exceed this.

Rapidly growing economy Indonesia is surrounded on the west and south with the Indian Ocean while Malaysia lies to the north and Papua New Guinea to the east. More than half of the country is covered with forests and 90 percent of the population is Muslim. The second largest group after Muslims is the Chinese minority. Even though Indonesian is the official language, English is broadly used in business		Jakarta
life. Indonesia entered a growth trend starting in 2002 due to increasing petroleum and natural gas prices, posting 5.6% growth in 2005, 5.9% in 2006 and 6.3% in 2007. During this time, manufacturing, construction and service sectors are the fields which have experienced the most growth. The Economist Intelligence Unit predicts that the growth trend in the country will continue with 5.7% growth in 2008, 5.9% in 2009 and 6% in 2010. With these growth rates, Indonesia is expanding its economy in a visible way.

Agriculture is the most important sector
Indonesia is the world’s second largest producer of rubber and the fourth largest producer of coffee. It is also the second largest exporter of palm oil after Malaysia. In summary, agriculture provides employment for 53% of the population and when fishing and forestry are included, it continues to be the most important source of employment in the country. However, manufacturing is one of the most noteworthy factors in the economic growth that Indonesia has achieved in recent years. Textiles, petro-chemicals, cement, fertilizers, base metals, motorcycles, paper, shoes, furniture, steel, glassware, household goods and electronic devices are the most significant sectors. In terms of foreign trade, Japan is Indonesia’s biggest partner followed by Singapore, South Korea and America. Currently, China is a topic of conversation around the world but it has been the topic of conversation in Indonesia for quite some time. In 2005, a multi-dimensional agreement was signed to strengthen mutual relations. Indonesia aims to increase its trade volume with China to 30 billion dollars by 2010.

Trade relations have gained momentum Trade volume between Indonesia and Turkey has increased three-fold since 2002. However, this has not developed favorably for Turkey. If we examine the export and import figures individually, we see that in 2007 our exports to Indonesia increased 103% to 174 million dollars while our imports increased 40% to 1.5 billion dollars. As the figures demonstrate, the balance of trade between the two countries is moving in Indonesia’s favor. This situation has not changed in the first four months of this year. From January to April, we exported 112 million dollars of goods and imported 595 million dollars worth.		Rice fields, Bali
Tobacco, wheat flour, polyester fiber, cotton, nylon hosiery, aluminum hydroxide, marble, iron/steel goods, rugs and flooring lead the list of products we export to Indonesia. Products we import from Indonesia include palm oil, rubber, polyvinyl chloride, synthetic and artificial discontinuous fiber, cotton, aircraft, radar, wireless and remote controlled device components.

50 million dollars of Turkish investment
Turkish investment in Indonesia is approximately 50 million dollars and is focused primarily in the areas of textiles and mining. However, Indonesian investments in Turkey are approximately 150,000 dollars. There are only two Indonesian companies operating in Turkey. If we look at the sectors in Indonesia which offer opportunities for Turkish companies, we see serious potential in the foodstuff sector. Production in the country is directed entirely at domestic consumption. However, it only meets 25% of domestic demand. There are significant opportunities in the foodstuff sector for Turkish companies, especially for pasta, biscuits, cooking oil, bottled water, milk, cheese and canned goods. Indonesia is the perfect place for the export of grains, beans, fresh fruits and vegetables and dried fruit. When we consider the fact that the country falls into the developing country category, the construction materials sector is especially important so there is great potential for iron/steel, cement and mining sectors.