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Newly established SwissCham to boost trade and investment between Indonesia and Switzerland

The newly established Swiss Indonesia Chamber of Commerce (SwissCham Indonesia) will serve as a platform to enhance trade, investment and other business relations between Indonesia and Switzerland.

Around 150 Swiss companies and brands currently operate in Indonesia, employing tens of thousands of workers.
Around 150 Swiss companies and brands currently operate in Indonesia, employing tens of thousands of workers.

SwissCham Indonesia chairman Luthfi Mardiansyah said the association would hold business forums as part of its main programs to promote bilateral economic relations.

“We see the need to establish a chamber of commerce to tap into Indonesia and Switzerland’s economic potential. The investment value from Switzerland to Indonesia   constantly increases, but there is still much room to grow”,  Luthfi  said.  For instance, Indonesia can export high-quality spare parts to supply Switzerland’s mechanical engineering industry.

Indonesia, he added, has small and medium-sized enterprises (SMEs) that are able to produce the items needed.

Luthfi also said many reputable industries in Switzerland had yet to   invest in Indonesia, such as chemical, pharmaceutical and travel businesses.

Switzerland among the largest foreign investors in Indonesia

Switzerland is among the largest foreign investors in Indonesia, according to the Investment Coordinating Board (BKPM). In 2017, it was ranked 12th in the list of Indonesia’s top foreign investors, with a total investment value of US$615.5 million for 227 projects, making it the third- largest European investor in the country.

According to the Trade Ministry, bilateral trade between the two countries reached $2.05 billion in 2017. Indonesia’s exports to Switzerland totaled $1.24 billion, accounting for 1 percent of Indonesia’s total exports. Meanwhile, imports from Switzerland totaled $810 million, which contributed 0.5 percent to the country’s total imports in 2017.

Swiss exports to Indonesia: Chemicals, pharmaceutical products, machinery, medical equipment and watches and jewelry

Indonesia mostly imported chemicals and pharmaceutical products, machinery equipment, medical equipment, and watches and jewelry, while exports mostly comprised precious metals.

Although the government has introduced a series of economic policy packages to improve the ease of doing business in Indonesia, Swiss companies operating in the country still face a number of problems, such as the regional autonomy hampering investment in regions, Luthfi said.

Therefore, SwissCham is expected to serve as a sharing platform and accommodate dialogues among business players and government officials from both countries, Luthfi said.

Doing business in Indonesia: Swiss exporters still face obstacles but also vast opportunities

Wolfgang Schanzenbach, Head of the Swiss Business Hub Indonesia at the Swiss Embassy in Jakarta shared the same opinion, saying there were still a number of obstacles in doing business in Indonesia. According to him, with such problems, Swiss investors had to spend more time before realizing their investment plan.

“However, once we overcome the problems, we can enjoy the growing business because the market is big enough, particularly for smaller and medium-sized companies in Switzerland”, Schanzenbach said, hailing the Indonesian government’s commitment to making the archipelago a better place for doing business.

Indonesia was ranked 72nd in the World Bank’s 2017 Ease of Doing Business Index, a jump from 91st place in 2016 ,   though still below that of neighboring countries Malaysia, Thailand, Brunei Darussalam and Vietnam.

Moreover, Schanzenbach said innovation and competitiveness were among Switzerland’s biggest strength.

Therefore, the association will also provide vocational training and capacity building to help SMEs improve their quality and subsequently tap into the international market, he added.

“President Joko Widodo wants to build the capacity of Indonesia’s younger generation, make them fit for professional life. Switzerland, with its sophisticated, well-established, education system and vocational training, can lend its support.”

Around 150 Swiss companies and brands currently operate in Indonesia, employing tens of thousands of workers.

 

This article was published in the Jakarta Post on 6 August 2018

More information about Indonesia

Inaugural Annual General Meeting of the Swiss-Indonesian Chamber of Commerce on 1 August 2018, the Swiss National Day

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