The Thinker: Let’s Rumba First

By webadmin on 09:27 am Jul 11, 2012
Category Archive

The Asean-Latin Business Forum in Jakarta this week ended on a high note. Indonesian officials gave examples of how successful the Latin American countries are in their chicken or cattle farming, food security projects, aircraft manufacturing, beverage industry, etc. All of it has the potential to help increase trade with Asean member states by 10 to 20 percent.

Indonesian exports to Latin America and the Caribbean have already reached $4.6 billion, dominated by products like livestock feed, sugar, cereal, iron and steel. But Indonesia seeks more.

Underlining the optimism is newly appointed Investment Coordinating Board (BKPM) chairman M. Chatib Basri, who said the second-largest and the largest companies in Brazil, the land of samba, had expressed their interest to invest in the automotive and food industries here.

Trade Minister Gita Wirjawan said that Indonesia must be proactive in exploring these new opportunities. It is true that Asean and the Latin American countries are two huge and dynamic regions with a population of 608 million and 578 million respectively, and which have a total trade value of $2.5 trillion. Both blocs are trying to promote trade since Europe and the United States are no longer preferred export destinations. The problem is selecting the right products since the Latin American countries already have most of what the Asean countries have to offer.

But Indonesia, especially, can learn much from the Latin American countries — like building an aircraft industry, developing biofuel and getting rid of fuel subsidies. Or even the simplest things, such as how to export bananas.

Ecuador, Costa Rica and Colombia generate almost three-quarters of world banana exports to Europe, Japan, Russia and the United States. Indonesia, which has more banana varieties, has never exported bananas. Indonesia can also learn from Mexico when it comes to salt and soybean production. Indonesia, with its vast coastline, still imports salt from India and soybeans from the United States.

Indonesia can’t expect to import high-quality beef from Argentina unless it changes an Australian-dictated import policy requiring imported beef to come from vaccinated cattle. Indonesia can learn from Brazil on how to make radical investments in small-scale farmers to complement the continued might of mega-plantations. This has led to increased food supply, reduced hunger in rural areas and stimulated internal demand, with knock-on effects for the rest of the economy. The technology, research and policy ideas are worth importing into Indonesia.

This problem of connectivity between Asean and South America was highlighted by the participants of the forum. Peruvian Trade and Tourism Minister Jose Luis Silva Martinot said that Peru is working with Korean Air and he expected that connectivity between the far-distanced region must be promoted first. South Korea is far better prepared in anticipating trade with the Latin American nations. Thirteen universities in South Korea provide graduate programs in Spanish.

Before all those ambitious trade initiatives can be carried out, cultural exchanges and people-to-people contact between Asean and South America must be promoted first. Culture, not just in the arts and traditions, but more comprehensively: way of life, aspirations and belief systems. The role of Peru’s iconic Machu Picchu site in attracting tourists to the country is reminiscent of our Borobudur temple complex. This offers opportunities for collaboration, as does the concept of sister cities. Once personal-level ties are established, trade will follow.

It must be understood that one has to value people and relationships over business. Leaping right into business and talking money before making the effort to build a personal relationship won’t work. The business protocol is to begin with good-natured small talk. These are the things that Indonesian businessmen must be aware of. In promoting trade with South America, as one participant said, “let’s rumba first, then talk trade.”  

Yanto Soegiarto is the managing editor of Globe Asia, a sister publication of the Jakarta Globe.