Visiting President of US-ASEAN Business Council Highlights Indonesia Opportunities

Visiting President of US-ASEAN Business Council Highlights Indonesia Opportunities

(Jakarta). In meetings this week with senior government officials and business executives in Jakarta, US-ASEAN Business Council President Ernest Z. Bower emphasized the importance of Indonesia to US companies and highlighted several very encouraging developments.

"Our companies are fully committed to Indonesia," Mr. Bower said. "Many of them are doing quite well here and looking forward to very good years." Mr. Bower cited several particular American business successes, among them Cisco Systems, Unocal, and WorldSpace. He pointed out that Cisco Systems sales of its networking hardware, software and services to Indonesia tripled in 2000. And just this past January, Council member WorldSpace signed a manufacturing, marketing and distribution agreement with PT Hartono Istana Teknologi to produce low cost satellite receivers.

"This is real business, supporting real jobs" continued Mr. Bower. "These companies are in Indonesia because of the outstanding business opportunities. Indonesia is an key market for U.S. business. The last few years have hurt sales and investment -- no question -- but even during difficult times in Indonesia, many sectors have remained very attractive to U.S. companies."

Another company referenced by the Council President was Unocal. Unocal Corporation's Indonesia subsidiaries expect to expand capital spending on new oil and natural gas projects in 2001 to increase the company's production levels. Capital spending on projects should almost double to a total of about US$200 million, up from US$107 million last year. Total expense is expected to rise to US$217 million, compared with U$182 million in 2000. Unocal has approximately 1500 employees in Indonesia (95% of whom are Indonesian nationals).

Unocal is currently pursuing development of the West Seno project, which will be Indonesia's first deepwater production. There will be two platforms and 48 wells. Production is expected to begin in later 2002 at 45,000 barrels of oil per day (bopd), ramping up to 60,000 bopd. Unocal hopes to join the bidding on the new deepwater production-sharing contract areas that will be offered soon.
"And business interest in Indonesia is more than anecdotal," Mr. Bower asserted, noting that U.S. investment in Indonesia increased by 28% in 1999. According to the Ministry of Industry and Trade, the upward trend in U.S. investment continued through the first half of last year, and the U.S. is the biggest single direct investor in Indonesia. Meanwhile, U.S. exports to Indonesia recovered sharply in 2000, expanding by 25% over 1999 to US$2.5 billion. U.S. imports from Indonesia reached US$10.3 billion last year, up 9% over 1999.

"We want to see more successes like these." said Mr. Bower. "The Council remains fully supportive of the economic reform process, and hope to see it reinvigorated. Reform will help unleash the market's full potential. It is a difficult transition, but in the longer term the reforms will pay major dividends for Indonesia."

ASEAN is the Association of Southeast Asian Nations. It comprises ten countries, 500 million people, and has a gross domestic product of $750 billion. ASEAN member countries include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

The US-ASEAN Business Council is a non-profit, national organization in the United States that works to promote increased trade and investment between the U.S. and the member countries of ASEAN. For information on the US-ASEAN Business Council or general information on the ASEAN region, please contact John Goyer or visit the Council's Web site at www.us-asean.org.

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