The 10e meeting of the Switzerland-Indonesia Joint Economic Commission (JEC) was held on Tuesday in Bern, under the leadership of Ambassador Andrea Rauber Saxer and Ambassador Umar Hadi, Director General of American and European Affairs at the Indonesian Ministry of Affairs foreign. The private sector was represented on the Indonesian side by KADIN, the umbrella organization for Indonesian companies, and on the Swiss side, by economiesuisse as well as representatives from the tech, pharmaceutical, textile, watchmaking, logistics and certification sectors.
This meeting was particularly well-timed for both delegations. Interesting developments have indeed occurred in recent months in bilateral economic relations between Switzerland and Indonesia.
New investment protection agreement complements existing trade agreement
The Swiss Parliament has approved at the end of 2023 the new investment protection agreement between Switzerland and Indonesia, which could therefore enter into force shortly. economiesuisse expects that this agreement, associated with that of economic partnership (CEPA) in force since 2021, will considerably strengthen the commercial and investment dynamics of Swiss companies in Indonesia and vice versa. CEPA has not yet boosted bilateral trade to the extent hoped for – but the potential is great. During the meeting, participants discussed measures to further increase the use of the agreement by businesses in both countries. One of these measures is the recognition of all preferential customs duties.
New opportunities with the new Indonesian president
Last February, the Indonesian people elected a new president in the person of Prabowo Subianto, who will take office in October 2024. The Swiss economy is eager to see the development of bilateral economic relations under the new presidency.
One of the president-elect’s priorities will undoubtedly be the construction and expansion of the new Indonesian capital Nusantara, started under current President Jokowi. As part of the meeting, participants addressed the question of a possible contribution of Swiss companies to this mega-project (in the field of infrastructure, water or transport, for example).
On the international scene, Prabowo Subianto will also continue to advance Indonesia’s membership in the Organization for Economic Co-operation and Development (OECD). Of the official discussions have been underway since February. As the largest economy in Southeast Asia (with some 275 million inhabitants), with growth forecasts of around 5% per year, Indonesia is hoping for international support for its reform plans. The latter concern in particular economic policy. Indonesia has considerable wealth in the form of raw materials (notably oil, natural gas, palm oil and nickel), which it wishes to further transform on its territory to capture the added value (“commodity”). downstream”).
Concrete approaches for sectoral issues
Finally, representatives of Swiss companies were also able to address various questions relating to economic exchanges. These include persistent difficulties in accessing innovative medicines in Indonesia, certain complex regulations regarding the importation of food and even restrictions on foreign investment in the Indonesian aeronautical industry. In addition, new Indonesian regulations regarding halal products are causing problems for several Swiss companies in connection with their export. Regarding the acceleration of the mutual recognition of halal certifications, the Indonesian delegation assured the Swiss economy of its active support.
