By Rudy M. Harahap and Yetty Martihandayani[1]
Whilst Indonesia is the Southeast Asia's largest economy, there is still less substantial improvement in the trading cooperation between New Zealand and Indonesia during the last five years. The total trade balance between Indonesia and New Zealand increased, but it was very slow. Indonesia is also still the net importer of the trading cooperation. The export to New Zealand from Indonesia increased slowly, but there was a stagnation of import from New Zealand by Indonesia (Figure 1).
The main exported products from Indonesia to New Zealand were still related to non-oil and gas products. It seems that there has been a substantial growth in the export of the non-oil and gas products to New Zealand from Indonesia (Figure 2).
If compared to the Indonesian’s imports from New Zealand, the products were still primarily dominated by non-oil and gas products also (Figure 3). Whilst New Zealand has produced oil and gas, its export to Indonesia was still low and could be stated as in an immaterial number.
To improve this trading, recently there has been more cooperation agreement in how to improve the trading cooperation related to oil and gas products between Indonesia and New Zealand. For example, New Zealand’s government has given more scholarships to many students from Indonesia to learn about geothermal energy. It seems that in the future there could an increase of import from New Zealand by Indonesia related to these products. For example, there is a possibility that Indonesia may import some technical tools related to oil and gas processing from New Zealand.
From the data, we can also interpret that there is a big opportunity to improve the cooperation for both of these countries. For example, the cooperation could be improved through exporting the main commodities of Indonesia (or also exporting the main commodities of New Zealand). The main exported commodities from Indonesia to other countries currently are textile, electronic, rubber and article thereof, palm oil, forest products, footwear, automotive, shrimps, cocoa, and coffee. However, there are also other potential commodities that can be exported from Indonesia to New Zealand, such as leather & leather products, medical instrument and appliances, medicinal herb, processed food, essential oil, fish & fish products, handicraft, jewellery, spices, stationery non-paper (source: the Ministry of Trade Republic of Indonesia, n.d.).
Mostly, many commodities in New Zealand are imported from other countries, such as China. Whilst Indonesia is nearer from New Zealand (if compared to China), it is an interesting question, why there New Zealand has more trading cooperation with China instead of Indonesia? Why there is no substantial trading cooperation between Indonesia and New Zealand? Currently, the main Indonesia’s trading partners are still Japan, China, Singapore, South Korea, and the United States of America (New Zealand Trade and Enterprise, n.d.). From this list of countries, there is a possibility that some products imported from China, in fact, are made in Indonesia. Or some products from China not directly imported to New Zealand, but are transferred from Indonesia.
Another possible explanation is because little is known about Indonesia from the perspective of New Zealand people and also reversely about New Zealand from the perspective of Indonesia. Another reason might be New Zealand people a bit wary when doing business with Indonesia people. A business person in New Zealand told me that business poeple in New Zealand still have a bad image about Indonesia, such as the high level of corruption, the difficulty doing business, and so on. I think that we need to understand more about this so we can improve the trading cooperation between Indonesia and New Zealand.
[1] Preliminary study to be submitted for discussion as part of GradForce’s program in supporting graduates from the universities in improving the business opportunities between Indonesia and New Zealand. The authors are the volunteer business analyst for GradForce (http://www.gradforce.co.nz/). All of the analysis is the responsibility of the authors.
References:
Whilst Indonesia is the Southeast Asia's largest economy, there is still less substantial improvement in the trading cooperation between New Zealand and Indonesia during the last five years. The total trade balance between Indonesia and New Zealand increased, but it was very slow. Indonesia is also still the net importer of the trading cooperation. The export to New Zealand from Indonesia increased slowly, but there was a stagnation of import from New Zealand by Indonesia (Figure 1).
Figure 1: Export, Import, and Total Trading from Indonesia to New Zealand.
Source: (Ministry of Trade Republic of Indonesia, n.d.)
The main exported products from Indonesia to New Zealand were still related to non-oil and gas products. It seems that there has been a substantial growth in the export of the non-oil and gas products to New Zealand from Indonesia (Figure 2).
Figure 2: Export to New New Zealand from Indonesia
Source: (Ministry of Trade Republic of Indonesia, n.d.)
If compared to the Indonesian’s imports from New Zealand, the products were still primarily dominated by non-oil and gas products also (Figure 3). Whilst New Zealand has produced oil and gas, its export to Indonesia was still low and could be stated as in an immaterial number.
To improve this trading, recently there has been more cooperation agreement in how to improve the trading cooperation related to oil and gas products between Indonesia and New Zealand. For example, New Zealand’s government has given more scholarships to many students from Indonesia to learn about geothermal energy. It seems that in the future there could an increase of import from New Zealand by Indonesia related to these products. For example, there is a possibility that Indonesia may import some technical tools related to oil and gas processing from New Zealand.
Figure 3: Import from New Zealand to Indonesia
Source: (Ministry of Trade Republic of Indonesia, n.d.)
From the data, we can also interpret that there is a big opportunity to improve the cooperation for both of these countries. For example, the cooperation could be improved through exporting the main commodities of Indonesia (or also exporting the main commodities of New Zealand). The main exported commodities from Indonesia to other countries currently are textile, electronic, rubber and article thereof, palm oil, forest products, footwear, automotive, shrimps, cocoa, and coffee. However, there are also other potential commodities that can be exported from Indonesia to New Zealand, such as leather & leather products, medical instrument and appliances, medicinal herb, processed food, essential oil, fish & fish products, handicraft, jewellery, spices, stationery non-paper (source: the Ministry of Trade Republic of Indonesia, n.d.).
Mostly, many commodities in New Zealand are imported from other countries, such as China. Whilst Indonesia is nearer from New Zealand (if compared to China), it is an interesting question, why there New Zealand has more trading cooperation with China instead of Indonesia? Why there is no substantial trading cooperation between Indonesia and New Zealand? Currently, the main Indonesia’s trading partners are still Japan, China, Singapore, South Korea, and the United States of America (New Zealand Trade and Enterprise, n.d.). From this list of countries, there is a possibility that some products imported from China, in fact, are made in Indonesia. Or some products from China not directly imported to New Zealand, but are transferred from Indonesia.
Another possible explanation is because little is known about Indonesia from the perspective of New Zealand people and also reversely about New Zealand from the perspective of Indonesia. Another reason might be New Zealand people a bit wary when doing business with Indonesia people. A business person in New Zealand told me that business poeple in New Zealand still have a bad image about Indonesia, such as the high level of corruption, the difficulty doing business, and so on. I think that we need to understand more about this so we can improve the trading cooperation between Indonesia and New Zealand.
[1] Preliminary study to be submitted for discussion as part of GradForce’s program in supporting graduates from the universities in improving the business opportunities between Indonesia and New Zealand. The authors are the volunteer business analyst for GradForce (http://www.gradforce.co.nz/). All of the analysis is the responsibility of the authors.
References:
- Ministry of Trade Republic of Indonesia. (n.d.). 10 Potential Commodities. kemendag.go.id. Retrieved March 27, 2014, from http://www.kemendag.go.id/en
- Ministry of Trade Republic of Indonesia. (n.d.). Balance of Trade With Trade Partner Country. kemendag.go.id. Retrieved March 27, 2014, from http://www.kemendag.go.id/en
- New Zealand Trade and Enterprise. (n.d.). Indonesia. Retrieved March 26, 2014, from https://www.nzte.govt.nz/en/export/export-markets/east-asia/indonesia/
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