Bali Promotion Center: President Susilo Bambang Yudhoyono's Opening Address at ASEAN-EU Business Summit

Jakarta Convention Centre, 5-5-2011

Opening Address at ASEAN-EU Business Summit

Bismillaahirrahmanirrahim

Excellencies, ASEAN Ministers and EU Trade Commissioner,

Excellencies, Secretary-General of ASEAN and Ambassadors,

Distinguished CEOs and Business Representatives from ASEAN and the European Union,

Distinguished Speakers and Guests,

Ladies and Gentlemen,

I am pleased to be here with you, at this first ASEAN-EU Business Summit.

When leaders and captains of industries and businesses from ASEAN and the European Union come together like this, I believe great things will happen.

This Business Summit is timely for ASEAN, as we make a final sprint to achieve a true ASEAN Community by 2015.

But, in realizing this objective, we are not without challenges.

The world recovery is indeed gaining strength. Yet, output gaps and unemployment remain high in advanced economies, while new challenges are building in emerging economies.

In the US and Japan, economic growth for 2011 is predicted to be lower. Meanwhile, the slow growth in Europe will keep fiscal positions and financial system in some countries vulnerable to shocks. In many emerging countries, inflationary pressures are building due to higher commodity prices.

The recent global financial crisis has prompted global leaders to work together, to achieve framework for strong, sustainable and balanced growth.

At the same time, the leaders also underlined the critical importance to address the root cause of the imbalances by adopting the Multi-Year Action Plan for Development, along with their commitment to address it in a coordinated fashion.

The G20 in Seoul agreed to further strengthen macroeconomic policy coordination, and take serious action:

First, to continue International Financial Institutions reform;

Second, to establish Global Financial Safety Net (GFSN);

Third, to ensure that G20 Framework reflect the development dimension;

Fourth, to continue to reject protectionism; and

Fifth, to strengthen the international banking system.

Although these goals have been agreed at the global level, it is important that we see practical result at the regional and bilateral level.

Despite the challenges that we will continue to confront, the global economy is steadily improving.

The IMF projects that for 2011 and 2012, the global economy is forecasted to grow by 4.5 percent.

The advanced economies of America, Europe and Japan will peak at 2.5 percent. We welcome the rebound of the EU economy following the economic crisis, with expectations that growth in 2011 will be similar to 2010 at around 1.8 percent.

And emerging markets will grow up to 6.5 percent per year. The high growth of the emerging markets is fueled by the dynamism of new economic powerhouses in Asia, Latin America and Africa.

We are also seeing rapidly growing South-to-South trade. In 2008, 54 percent of export growth in developing countries is due to demand from other developing countries; the figure was only 12 percent in 1998.

In Asia itself, the picture is even brighter. The Asian Development Bank recently reported that, by 2050 Asia could account for about half of global output and half of global trade and investment.

The economic growth in Asia is driven by countries such as India and China, and also ASEAN. And they are all formulating strategies to maintain their economic growth, and these economies are also becoming increasingly integrated.

For example, China is rebalancing its sources of economic growth. It is re-orienting its sources of economic development to knowledge-intensive products, services, and environmentally friendly and sustainable processes.

Meanwhile, India continues to liberalize its economy with reforms and deregulation, to overcome energy subsidies issues and develop its infra- structure.

Much has also been gained in achieving an ASEAN economic community. When leaders agreed on the vision of an ASEAN Community in 2003, the size of the ASEAN economies was $700 billion, and now it becomes $2.9 trillion. If we include ASEAN and the six partners which it already has trade agreements – China, Japan, Korea, India, Australia and New Zealand - then the size is amount to $15 trillion, or the same economic size as EU and US.

Thus, the EU can be a strong partner with ASEAN to develop together. Europe has a much longer experience in economic integration and community building. ASEAN has and will continue to learn from the European experience.

There is no doubt that ASEAN and EU are important to each other. EU is the second largest trading partner for ASEAN, and the largest investor, while ASEAN is EU’s fifth largest trading partner.

There is also increasing people to people engagement, such as the forum we are attending today. There are some 7 million Europeans visiting ASEAN every year. Thus, it is timely to increase our engagement, including the discussions towards a more formal economic cooperation agreement between ASEAN economies and the EU. Indonesia and EU have just completed the Indonesia-EU vision report on invigorating EU-Indonesia Partnership.

As Chair of ASEAN this year, Indonesia has three key priorities.

First is to ensure significant progress of achieving ASEAN Community by 2015. For the ASEAN Economic Community, this means a process of widening and deepening ASEAN Economic as an engine of growth.

But Indonesia’s vision of ASEAN is also to ensure that, we narrow the development gap between ASEAN economies and within the member countries of ASEAN. We need to aspire to a more equitable and inclusive ASEAN. In this respect, I believe infrastructure building and connectivity is not just about efficiency but also about reducing disparities. Again, this offers opportunity for investment.

ASEAN will also continue its cooperation and regional mechanism, to respond to macro economic, food security and other challenges.

The second priority is to strengthen ASEAN cohesion to craft East Asia wide regionalism and architecture.

This involves coordination for macro economic policy, for instance in dealing with food and energy security challenges; consolidation of the various trade agreements; and addressing climate change issues.

The third priority is to ensure that regional agreements and cooperation can contribute to global agreements and governance. The increasing involvement of ASEAN in the international forum, should be aimed not only to foster regional economic and financial growth, but also to encourage investment in the region and improve our resilience towards future crisis.

In partnership, ASEAN and EU can work together to manage the world economy, especially on issues of common concern in the G20 and WTO. For instance, we share the view regarding the importance of concluding the Doha negotiations, to ensure confidence in the multilateral trading system and the high cost of lack of progress.

Ladies and Gentlemen

The global and regional circumstances have placed Indonesia in a rather unique position. While the rest of the world continues to grapple with the repercussions of the global financial crisis, our economy grew by 4.5 percent in 2008, and then 6.1 percent in 2010.

This year, we expect to grow by around 6.3 percent. And there are even predictions that growth could reach more than 7 percent by 2014.

Our export is expected to reach close to 200 billion by this year, or double from $100 billion in 2006. And our reserves stand at over US$ 100 billion, the highest in our history.

After pressures from food prices last year, we have managed inflation this year with inflation coming down in 2011. Inflation for the first four months to 0.39 percent or 6.16 percent year on year, and we are keeping a prudent fiscal policy, with deficit below 2 percent.

Our debt to GDP ratio has shrunk dramatically, from 77 percent in 2001 to 26 percent in 2010. These statistical achievements have manifested in our credit rating evermore improving.

Agencies such as Moody''''s and Fitch''''s have improved Indonesia''''s Sovereign Rating to only 1–2 level below Investment Grade, and Indonesia''''s outlook to stable/ positive. And since July 2010, the Japan Credit Ratings Agency has raised Indonesia’s Rating to Investment Grade.

Call me an optimist, but I am confident that other international rating agencies will soon follow the Japanese lead, and make positive revisions to their earlier assessments.

And what does Indonesia have to show for its improved credit ratings?

In 2010, investment rebounded to an all-time high of Rp 208,5 trillion - or about US$ 22.95 billion. For a country that experienced billions of dollars in capital flight during the late 1990s, this is an achievement worth noting.

Let alone the fact that such a turnaround occurred within the span of just more than a decade.

Indonesia is now the world’s 17th largest economy. But our aim is to be in the top 10. And why wouldn’t we have such optimism, when even the IMF is predicting that Indonesia’s economy will be larger than Australia’s within less than a decade.

I could go on raving about my country, by stating several other valuable statistics. But each delegate in this room will only have to step out of this convention centre, to witness all that I have mentioned here.

The dynamism of the people. Our newfound confidence. Our pride. And our resilience to overcome all that has been thrown at us.

What you will see is a portrait of a society living in maturing democracy. A democracy that has created political stability, something very much sought after by the business community.

A democracy that has allowed freedoms of speech and freedom of the press unseen before in our history. In turn, these freedoms have transpired into greater transparency and accountability needed for governance.

What you will see is a portrait of a vibrant people, aspiring to harness their full potentials.

In the next 20 years, Indonesia will enter a period of “Demographic Bonus” with a dependency ratio below 0.5. In other words, more than half of our population is within the productive age. That’s a workforce of more than 120 million people.

More than half of our population will be below 30 years of age, bestowing the nation with a great pool of productive and technology-savvy human resources. And making Indonesia the second largest facebook users in the world at 35.8 million users, out of which 54 percent are in the 16-24 age group.

We have among us a new generation of dynamic entrepreneurs, who are keen to bring Indonesia to the world, and the world to Indonesia.

And we have a lucrative market made up of the largest middle-class in Southeast Asia, with half of the population living modern lifestyles in urban areas.

Excellencies,

Ladies and gentlemen,

To continue its growth as a stable democracy and an emerging economy, Indonesia must reach conditions of good governance and strong macro-economic fundamentals. An economic growth of over 7 percent must be complemented by a poverty rate below 8-10 percent, and corruption significantly reduced.

In addition to harnessing the potentials of the middle class, entrepreneurs, and tech-savvy urbanites, we must ensure a balanced growth across our provinces and rural areas, as well as attain food and energy security.

These are all the elements of “growth with equity strategy", that we have been pursuing all these years.

In spite of our rich natural resources and huge workforce potential, much of this remains under exploited for the benefit of the people’s prosperity. Challenges include development gaps between regions, underdeveloped infrastructure, and intensifying regional competition.

Therefore, we have developed the master plan for the acceleration and expansion of Indonesia economic development.

Our master plan is built upon three strategies.

The first is through developing six economic development corridors, in which industrial clusters will be established to take full advantage of our abundant resources.

The second is through developing national connectivity, aimed at not only local integration, but also international connections.

The third is through accelerating our scientific and technological capability and innovation, with a view to enhancing Indonesia’s level of competitiveness.

Moreover, the ground supporting these three pillars will comprise of national policies in the field of investment, trade, finance, and public-private partnership.

We welcome and encourage foreign participation in implementing these strategies. We invite you to seize the abundant opportunities and explore the wide possibilities in Indonesia, for businesses and investments.

Ladies and gentlemen,

You have made an excellent choice of an agenda. And you have chosen just the right country for deliberating on that agenda.

So let this Summit be your chance to play a role in changing the paradigm on which economic policies are made. To turn the tide of events in favour of both our regions.

I look forward to receiving your concrete recommendations for win-win policy initiatives. Recommendations that would boost region-to-region cooperation.

This is your chance. Let us together make things happen!

And now it is my pleasure to declare the First ASEAN-EU Business Summit officially open. I wish you every success in your important deliberations.

Thank you.

ASEAN dan Uni Eropa Saling Membutuhkan

Jakarta: Menurut Bank Pembangunan Asia, tahun 2050 nanti setengah perdagangan dan investasi dunia berada di Asia. Pembangunan ekonomi ini Asia dipicu oleh negara seperti RRT, India, serta ASEAN.

"Kami semua memformulasikan strategi untuk menjaga agar ekonomi tetap tumbuh dan semakin terintegrasi," kata Presiden Susilo Bambang Yudhoyono dalam sambutan pembukaan KTT Bisnis ASEAN-Uni Eropa yang pertama di Jakarta Convention Center, Kamis (5/5) pagi.

Di ASEAN sendiri, ketika pembentukan Komunitas ASEAN disetujui pada tahun 2003 lalu, volume perdagangan ASEAN sebesar 700 milyar dolar AS. Saat ini sudah mencapai 2,9 triliun dolar AS. Jika ditambah dengan enam mitra ASEAN, seperti RRT, Japan, Korea Selatan, India, Australia, dan Selandia Baru, maka besaran volume perdagangan akan mencapai 15 triliun dollar AS. “Ini sama dengan ekonomi Uni Eropa dan Amerika Serikat," Presiden SBY menjelaskan.

UE bisa menjadi mitra strategis ASEAN. Eropa, kata SBY, punya banyak pengalaman dalam integritas ekonomi dan komunitas, dan ASEAN pernah dan akan terus belajar dari pengalaman tersebut.

"Tidak perlu diragukan lagi, ASEAN dan UE saling membutuhkan. UE merupakan mitra dagang kedua terbesar dan investor terbesar bagi ASEAN. Sementara ASEAN adalah mitra dagang terbesar bagi UE, selain banyak juga peningkatan pertemuan sesama warga seperti dalam forum ini," SBY menambahkan.

Ada sekitar tujuh juta warga Eropa mengunjungi ASEAN setiap tahun. Menurut Kepala Negara, sudah waktunya ASEAN dan UE melibatkan diri menuju perjanjian kerjasama perekonomian yang lebih formal. “Indonesia dan Uni Eropa baru saja menyelesaikan laporannya untuk menyegarkan visi Uni Eropa-Indonesia Partnership,” kata SBY. (dit)

President Susilo Bambang Yudhoyono opened the first ASEAN - European Union Business Summit at the Jakarta Hall Convention Center here on Thursday morning. ASEAN-EU Business Summit is a high level forum for business players and governments to deal with problems arising from trade relations between the two regional groupings.

Chief of ASEAN Economic Minister Mari Elka Pangestu who is also the Indonesian trade minister said the summit was also intended to look into business and investment opportunities in both sides.

At the business summit participating companies from EU and ASEAN member countries will discuss opportunities in the areas of infrastructure (including transportation and logistics), agri-food, health (including pharmacy), automotive and service (telecommunication and finance).

The participating companies are expected to discuss their inputs with ten ASEAN economic and trade ministers and the EU special trade commissioner. The outcome of the business summit will be brought to an annual meeting of ASEAN and EU economic ministers for approval.

Since the business summit will accommodate the aspirations of ASEAN and EU business players, the outcome of the meeting will hopefully reduce constraints in their efforts to enhance investment and trade ties.

Trade between EU and ASEAN last year reached 147 trillion euros. EU is ASEAN’s second biggest trade partner while ASEAN is EU’s fifth biggest trade partner. EU is also the biggest investor in Southeast Asia.